Accounting Regulatory Bodies 13

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Accounting Regulatory Bodies
The success of an organization relies heavily on accounting. Investors are extremely important to publicly traded companies, and they rely on accurate accounting documents when choosing whether or not they want to invest in a company. Several accounting regulatory bodies exist, and each of them plays an important role in accounting and the effects that accounting has on an organization. The primary goal of these regulatory bodies is to establish a set of rules and regulations and help improve the financial accounting standards of organizations. A few of such bodies are the Securities and Exchange Commission, the Financial Accounting Standards Board, the Government Accounting Standards Board, and the International Accounting Standards Board. Securities and Exchange Commission

The Securities and Exchange Commission (SEC) is a government agency that has been given several responsibilities and a great deal of power. Its mission is to “protect investors, maintain fair, orderly, and efficient markets, and facilitate formation” (About the SEC, 2008). The SEC is responsible for enforcing several federal security laws, including the Securities Act of 1933, the Securities Exchange Act of 1934, and the Sarbanes-Oxley Act of 2002 (About the SEC, 2008). The Sarbanes-Oxley Act was passed in response to several corporate scandals such as Enron and WorldCom, after investors lost billions of dollars, and after the public’s confidence in the security of the nation’s markets declined (Wikipedia, 2008). Businesses comply with the SEC by following the rules and regulations that have been set in place. Failure to follow these regulations will result in disciplinary action. Financial Accounting Standards Board

The Financial Accounting Standards Board (FASB) is the “private sector body given the primary responsibility to work out the concepts and detailed rules that become generally accepted accounting principles (GAAP)” (Phillips, Libby, &...
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