Which organization is responsible for setting standards in government accounting?

The Government Accounting Standards Board (GASB) is the correct answer because it is the organization specifically tasked with establishing accounting standards for state and local governments in the United States. GASB develops and issues guidelines that are used to ensure accountability and transparency in government financial reporting, making it a crucial authority in the realm of governmental accounting.

GASB standards help improve the consistency and comparability in financial reports that government entities prepare, benefiting both policymakers and citizens alike who rely on these reports for making informed decisions regarding public resources. The board operates independently and is recognized for its role in enhancing public trust by ensuring that governmental financial information is accurate and understandable.

The other organizations mentioned have distinct responsibilities. The Government Accountability Office (GAO) primarily conducts audits and evaluations to help Congress oversee federal agencies, while the Federal Accounting Standards Advisory Board (FASAB) focuses specifically on accounting standards for federal government entities. The International Financial Reporting Standards Board (IFRSB) sets standards for private-sector companies and is not specifically tailored to government accounting in the U.S.