Accounting Regulatory Bodies

Essay by tranadUniversity, Bachelor'sA, May 2008

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There are many accounting regulatory bodies, like the Securities and Exchange Commission. Each one performs specific tasks and sets regulations for the accounting industry. This paper will discuss the responsibilities of four regulatory bodies. The paper will also discuss how organizations comply with the standards of these four regulatory bodies.

U.S. Securities and Exchange CommissionInvesting in stocks and bonds is not only lucrative, but can be very risky as well. This is why the U.S. Securities and Exchange Commission (SEC) was created – to protect investors. The goal of the SEC is that “all investors, whether large institutions or private individuals, should have access to certain basic facts about an investment prior to buying it, and so long as they hold it” (SEC, 2008). The SEC protects investors by making information clear and accessible. This is done by requiring all public companies to disclose all of their financial information to the public.

This enables investors to determine whether or not to buy, sell, or hold.

The SEC is made up of five commissioners appointed by the President. The commission interprets federal securities laws, issues new rules and amends existing rules, oversees the inspection of securities firms, brokers, investment advisors, and ratings agencies, oversees private regulatory organizations in the securities, accounting, and auditing fields, and coordinates U.S. securities regulation with federal, state, and foreign authorities. The commissions meeting are held regularly and are open to the public and media unless the topic is confidential. The SEC enforces these requirements by bringing civil enforcement actions against companies and individuals who violate the laws, like insider trading and accounting fraud.

Financial Accounting Standards BoardThe Financial Accounting Standards Board (FASB) is a seven-member independent board consisting of accounting professionals. Their duty, to establish and communicate standards of accounting and reporting in the U.S. FASB...