Accounting Regulatory Bodies Essay

1147 WordsOct 4, 20105 Pages
Accounting Regulatory Bodies In order to maintain order and standards in business, companies must adhere to certain criteria when reporting their accounting practices. The standards by which American businesses operate may vary from their foreign counterparts. Foreign businesses and their government agencies must tailor their accounting guidelines to comply with their country’s specific needs. In America, government agencies such as the Federal Exchange and Securities Commission, regularly monitor and audit companies to make sure they are in compliance with the rules and regulations set. The implementation of accounting and financial reporting criteria is not only in place to safeguard American businesses, but also protects business owners, employees and consumers. These standards instituted by government agencies or business executives prevent chaos and hold businesses accountable for maintaining proper financial responsibility. Regulatory Environment The United States has several organizations that create, maintain, and audit accounting standards. The two primary organizations that specify generally accepted accounting principles (GAAP) are the Securities and Exchange Commission (SEC) and the Financial Accounting Standards Board (FASB). The SEC has been appointed by the federal government through delegated authority by Congress. The SEC then generally accepts practices deemed appropriate from the FASB. Aside from the FASB and SEC many national, state, and local accounting organizations that work with these accounting methods to maintain them, refine them, and improve them. One such major organization is the Government Accounting Standards Board (GASB). The GASB is not a government entity but a nonprofit group that studies accounting practices and principles and if necessary brings them to the attention of the FASB and SEC in and advisory capacity.

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