Accounting Regulation
Accounting Regulation
With the recent accounting discrepancies that have taken place in some of America’s largest and well known corporations greater importance is being placed on the creation and monitoring of financial reports. Some of these organizations which regulate how financial reports and compiled are private, given a charter by a federal agency, others were born from the creation of new laws and regulations, some are state agencies, and many more are private organizations made up of academics and certified public accountants who altruistically want to improve ethics in one’s field of accountancy. These organizations include the Financial Accounting Standards Board (FASB), the Public Company Accounting Oversight Board (PCAOB), the Securities and Exchange Commission (SEC), and the International Accounting Standards Board (IASB).
Companies which operate within the United States must compile financial reports within the guidelines set forth by the (SEC) and the (FASB); the (FASB) ensures that all companies focus on the characteristics of relevance and reliability when generating financial reports while staying within the guidelines of the Generally Accepted Accounting Principles (GAAP). When companies do not follow these guidelines they can be sanctioned by the (SEC) (Facts about FASB, 2009). The (PCAOB) was granted investigative and disciplinary power by the Sarbanes-Oxley Act of 2002; this act was established as a result of major American corporations falsifying financial data in an attempt to make one’s company appear more profitable than it was. The (PCAOB’s) primary responsibility is to ensure that public accounting firms conduct regular audits of internal controls and to evaluate the consistency of published financial statements. The (IASB) is a global regulatory body which is an offshoot of the International Financial Reporting Standards (IFRS); the (IFRS) sets standards for financial reporting for small to medium businesses which make up
With the recent accounting discrepancies that have taken place in some of America’s largest and well known corporations greater importance is being placed on the creation and monitoring of financial reports. Some of these organizations which regulate how financial reports and compiled are private, given a charter by a federal agency, others were born from the creation of new laws and regulations, some are state agencies, and many more are private organizations made up of academics and certified public accountants who altruistically want to improve ethics in one’s field of accountancy. These organizations include the Financial Accounting Standards Board (FASB), the Public Company Accounting Oversight Board (PCAOB), the Securities and Exchange Commission (SEC), and the International Accounting Standards Board (IASB).
Companies which operate within the United States must compile financial reports within the guidelines set forth by the (SEC) and the (FASB); the (FASB) ensures that all companies focus on the characteristics of relevance and reliability when generating financial reports while staying within the guidelines of the Generally Accepted Accounting Principles (GAAP). When companies do not follow these guidelines they can be sanctioned by the (SEC) (Facts about FASB, 2009). The (PCAOB) was granted investigative and disciplinary power by the Sarbanes-Oxley Act of 2002; this act was established as a result of major American corporations falsifying financial data in an attempt to make one’s company appear more profitable than it was. The (PCAOB’s) primary responsibility is to ensure that public accounting firms conduct regular audits of internal controls and to evaluate the consistency of published financial statements. The (IASB) is a global regulatory body which is an offshoot of the International Financial Reporting Standards (IFRS); the (IFRS) sets standards for financial reporting for small to medium businesses which make up