Accounting Regulatory Essay

557 WordsAug 18, 20083 Pages
Accounting Regulatory Bodies Accounting regulatory bodies govern accounting practices around the globe. Although individual regulatory bodies adopt their own guidelines and standards they remain similar in many ways. Individual countries often integrate their own regulatory bodies, yet international organizations are compelled to abide by regulatory bodies adopted by their country of origin in addition to international guidelines. The Sarbanes-Oxley Act of 2002(SOX) was signed into law by President George W. Bush to provide publicly traded companies with additional rules and guidelines for their accounting procedures. This act has had many opponents based largely on the cost associated with maintaining these new standards, however, the purpose of its enactment was to curb fraudulent financial reporting (FFR). SOX is intended to curb FFR by crating strict “procedures regarding the accuracy and reliability of corporate disclosures, places restrictions on auditors providing non-audit services, and obliges top executives to verify their accounts personally” (Siegel & Shim 2005, p. 402). The Federal Trade Commission (FTC) was created in 1914 for the purpose of “preventing unfair methods of competition and commerce.” (FTC.gov, 2008) However, the United States Congress passed legislation outlawing unfair and deceptive acts and practices within organizations. This allows the FTC to monitor and punish those organization that conduct unethical and illegal activities within their own accounting departments. The Financial Accounting Standards Board (FASB) sets generally accepted accounting principles (GAAP) for the United States. These established GAAP principles are recognized by many federal agencies including the Securities Exchange Commission. International Financial Reporting Standards (IFRS) are established by the International Accounting Standards Board to allow

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