The Accounting Principles Board (APB) was a group that issued authoritative pronouncements about accounting theory and the practical application of accounting. The APB was organized and overseen by the American Institute of Public Accountants, and operated from 1959 to 1973. Membership varied between 18 and 21 members, with most participants coming from the major accounting firms.
The APB was then replaced by the Financial Accounting Standards Board (FASB). The main reasons for the replacement were:
- The need for an independent organization was considered necessary, since there was a potential for the APB to be influenced by its parent organization
- The small amount of output generated by the APB
- The large number of qualified approvals appended to APB opinion documents by APB members
The output of the APB was relatively small for an organization that operated for 14 years, with only 31 opinions and four statements issued during that time. However, much of this material proved to be influential in shaping later accounting standards, and some of the opinions remain partially in force. Examples of those opinions still used deal with the content and structure of the financial statements, such as the consolidation of financial statements, the treatment of debt, and interim financial reporting.
The reason for the low level of output from the APB was that its members operated on only a part-time basis. Its replacement, the FASB, has proven to be much more effective, since it has a fully-funded full-time staff. Accordingly, the FASB has issued far more content, spanning a broad range of accounting topics.