Accounting Regulatory Bodies
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Kristina Tontis
February 8, 2008
Accounting is to provide information that is needed to make reliable economic decision. Financial accounting is to prepare financial reports that provide information about an organization's performance to external audiences (investors, creditors, and regulators) although they are widely used internally as well. Also financial accounting is performed according to General Accepting Accounting Principles (GAAP) guidelines.
The Securities and Exchange Commission (SEC), Financial Accounting Standards Board (FASB), Federal Accounting Standards Advisory Board (FASAB), Governmental Accounting Standards Board (GASB), IRS, and other regulatory bodies set accounting standards and requirements for accounting frequency and presentation.
Security and Exchange Commission
The mission of the SEC is to protect investors, maintain fair, orderly, and efficient markets, and facilitate capital formation (www.sec.gov, 2008). While congress is responsible for creating and passing securities laws, it is left up to the SEC to interpret and coordinate the implementation of such laws. This is not an easy task and requires a combined effort from several other agencies.
Financial Accounting Standards Board
The FASB was designated by the SEC in 1973 to establish the private sector standards of financial accounting and reporting (www.fasb.org/facts/index.html, 2008). As with the SEC, the FASB must operate to protect public users of the various financial reporting documents from fraud and misleading information. The FASB standardization has provided continuity in financial reports that allow investors to compare financial statements across companies and in some cases, industries.
Governmental Accounting Standards Board
While the FASB has authority in the accounting and...
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