The 2008 Financial Crisis caused a drought like condition for people all over the world and specially United States. The rates of unemployment rose high and all types of investments proved to be wrong. Trillions of dollars were lost. It all started with United States and percolated down to so many countries that it became the Global Financial Crisis. As we all know, it is the basic human behavior to blame something else for their troubles, several people have pointed their fingers at greed or credit. However, it is the belief of many bankers and economists that it was caused by unethical use of fair-value accounting, which is basically a rule for measuring companies’ liabilities and assets. Fair-value accounting has had a major effect on most of the financial troubles of almost all the nations. However, investigative evidences till date point mostly towards the overvaluation of banks’ assets. Could accounting rules have caused a world-wide financial crisis? That is what we will be discussing here. We will also discuss what happened in US as it is the epicenter of this GFC, the measures taken by Financial Accounting Standards Board (FASB) of US, the responses and actions taken by International Accounting Standards Board (IASB) and how and why Australia Accounting Standards Board (AASB) responded to GFC