Accounting Regulatory Bodies Paper

Essay by yayayeoUniversity, Bachelor'sA, September 2009

download word file, 2 pages 0.0

The United States has accounting laws set into place to ensure the integrity of financial records for businesses. This paper will examine four accounting regulatory bodies and discuss how an organization complies with the standards of the regulatory bodies. The Financial Accounting Standards Board, Securities and Exchange Commission, Governmental Accounting Standards Board, and the Public Company Accounting Oversight Board are the four bodies discussed in this paper.

The Financial Accounting Standards Board (FASB) is a private not for profit organization whose primary function is to develop generally accepted accounting principles (GAAP) within the United States in the public's interest (, 2009). The FASB is made up of a seven-member board consisting of accounting professionals who adhere to the GAAP and govern the preparation of corporate financial reports. The SEC requires all publicly held companies to abide by the guidelines and rules set by the GAAP. The FASBs’ job is to improve the standards of financial accounting practices by enforcing the reporting guidelines of any users of financial information.

The Securities and Exchange Commission (SEC) is an independent, nonpartisan regulatory agency with responsibility for administering the federal securities laws (, 2009). The SEC was created by Congress to regulate the securities market, protect investors, and prevent corporate abuse involving the offering and sale of securities and corporate reporting. The SEC is made up of five commissioners appointed by the U.S. President and approved by the Senate. The SEC protects investors by promoting full public disclosure, fraud, and controlling practices in the securities sector. To comply with the SEC all public companies annual reports are to include a report from management about the company’s internal control over financial reporting, and are required to disclose their financial information to the public (Phillips, Libby, Libby, 2005). The SEC also partners with many other institutions...