It is an independent organization in the private sector, operating with the goal of ensuring objectivity and integrity in financial reporting standards.

[2] The Wheat Report also recommended creating a Financial Accounting Foundation with nine salaried trustees to select board members of the FASB.

According to the New York Times, the system "provoked sharp criticism" in relation to types of companies with mixed private and government ownership.

Detractors argued the system made it difficult for investors and bond rating agencies to "compare the financial statements of, for example, a private college with those of a state-owned school.

"[8] As of August 1985, FAF trustees continued to have voting power to decide replacements on the seven member board of the FASB.

Higher-education groups reportedly favored the change, but according to the New York Times, it also "produced a far-reaching outcry in the accounting profession and the agencies affected," particular state and local government groups, some of which began working to form a new accounting standards agency separate from the FAF.

Part of the deal involved the FAF agreeing to expand the foundation directors representing the public to five, rather than one.

[15] In response to SEC recommendations, in April 2023, FAF added features to its website for stakeholders to make complaints about the FASB and GASB's adherence to procedure.

The original nine trustees were appointed in late September, 1972, with Ralph E. Kent elected FAF president.

[19] In February 2020, FAF appointed former acting president John Auchincloss as the foundation's executive director.

[23] Edward C. Bernard was named chairman of its board of trustees in November 2022, with the three-year chairmanship beginning on January 1, 2023.