Which statement correctly describes the authority of FASB pronouncements?

The correct statement is that all FASB pronouncements hold the same authority in accounting. The Financial Accounting Standards Board (FASB) establishes and updates the Generally Accepted Accounting Principles (GAAP) that govern financial reporting in the United States. These pronouncements apply universally to all entities that prepare financial statements in compliance with GAAP, regardless of whether they are public or private companies.

This consistency in authority ensures that financial reporting is uniform across various sectors and types of businesses, leading to reliable and comparable financial information. While some accounting standards may focus on specific industries or transactions, these do not diminish the general authority of all FASB pronouncements as a cohesive framework guiding accounting practices. This uniform authority is crucial for maintaining trust and transparency in the financial reporting system.