Accounting Regulatory Agencies
ACCOUNTING REGULATORY AGENCIES
Introduction
Accounting standards are needed so that financial statements will fairly and consistently describe financial performance. Without standards, users of financial statements would need to learn the accounting rules of each company, and comparisons between companies would be difficult. Numerous accounting bodies govern the accounting environment and accommodate the success of a business. The four main financial governing bodies include the following: • Securities and Exchange Commission (SEC) • Financial Accounting Standards Board (FASB) • Governmental Accounting Standards Board (GASB) • International Accounting Standards Board (IASB)
Securities and Exchange Commission (SEC) The Securities and Exchange Commission is a U.S. regulatory agency that has the authority to establish accounting standards for publicly traded companies. The SEC provides financial reporting requirements both form and content - including GAAP - as well as regulation of various financial services entities and market mechanisms. The SEC retains the right to overrule FASB pronouncements, and it occasionally exercises this right. The SEC would appear to have the most legal power in response to the establishment of standards. The Office of the Chief Accountant assists the Commission in executing its responsibility under the securities laws to establish accounting principles, and for overseeing the private sector standards-setting process. The Office works closely with the Financial Accounting Standards Board, to which the SEC has delegated authority for accounting standards setting, as well as the International Accounting Standards Board and the American Institute of Certified Public Accountants. The Office also consults with registrants and auditors on a regular basis regarding the application of accounting and auditing standards and financial disclosure requirements .
Introduction
Accounting standards are needed so that financial statements will fairly and consistently describe financial performance. Without standards, users of financial statements would need to learn the accounting rules of each company, and comparisons between companies would be difficult. Numerous accounting bodies govern the accounting environment and accommodate the success of a business. The four main financial governing bodies include the following: • Securities and Exchange Commission (SEC) • Financial Accounting Standards Board (FASB) • Governmental Accounting Standards Board (GASB) • International Accounting Standards Board (IASB)
Securities and Exchange Commission (SEC) The Securities and Exchange Commission is a U.S. regulatory agency that has the authority to establish accounting standards for publicly traded companies. The SEC provides financial reporting requirements both form and content - including GAAP - as well as regulation of various financial services entities and market mechanisms. The SEC retains the right to overrule FASB pronouncements, and it occasionally exercises this right. The SEC would appear to have the most legal power in response to the establishment of standards. The Office of the Chief Accountant assists the Commission in executing its responsibility under the securities laws to establish accounting principles, and for overseeing the private sector standards-setting process. The Office works closely with the Financial Accounting Standards Board, to which the SEC has delegated authority for accounting standards setting, as well as the International Accounting Standards Board and the American Institute of Certified Public Accountants. The Office also consults with registrants and auditors on a regular basis regarding the application of accounting and auditing standards and financial disclosure requirements .
References: - “IFRS - Convergence or Adoption” retrieved from http://www.accountingtoday.com/news/IFRS-Convergence-Adoption-55554-1.html - “Our Standards-Setting Process” retrieved from http://www.fasb.org/facts/index.shtml#decision-making -“About the governance and accountability arrangements of the organization” retrieved from http://www.ifrs.org/The+organisation/Governance+and+accountability/ governance+and+accountability.htm -“Facts about GASB” retrieved from http://www.gasb.org/jsp/GASB/Page/GASBSectionPage&cid=1175804850352 -“How the SEC Protects Investors, Maintains Market Integrity, and Facilitates Capital Formation” retrieved from http://www.sec.gov/about/whatwedo.shtml - “Due process” retrieved from www.iasb.org/NR/rdonlyres/1E8D75B7927F.../DueProcess09.pdf - “The Development of financial accounting and reporting standards” retrieved from Spiceland, J. David; James F. Sepe and Mark W. Nelson, (2011) Intermediate Accounting, Sixth Edition. New York, McGraw-Hill Companies, Inc