Accounting Regulatory Bodies

In: Business and Management

Submitted By millers4244
Words 548
Pages 3
Accounting Regulatory Bodies
University of Phoenix
Principles of Accounting
ACC/300

Financial accounting is necessary for managers to make educated decisions for future operations based on accurate company financial data. The company’s accountants also prepare financial reports on a regular basis to provide company financial information and performance to external audiences such as investors, creditors, and auditors. These reports must conform to the Generally Accepted Accounting Principles (GAAP) which were put in place by the Securities and Exchange Commission (SEC) and enforced by several other agencies. This paper will discuss some of these regulatory bodies and how a company must comply with these agencies.
The Securities and Exchange Commission (SEC), Financial Accounting Standards Board (FASB), Governmental Accounting Standards Board (GASB), Internal Revenue Service (IRS) and other regulatory bodies set accounting standards and requirements for accounting reporting frequency and presentation.

The SEC was created in during the great depression in 1934 following the stock market crash in 1929.The SEC was initially created to regulate the stock market and prevent large corporations from abusing the sale and reporting of stocks. The SEC enforces seven major laws that govern the trading industry: the Securities Act of 1933, the Securities Exchange Act of 1934, the Trust Indenture Act of 1939, the Investment Company Act of 1940, the Investment Advisers Act of 1940, the Sarbanes-Oxley Act of 2002 and most recently, the Credit Rating Agency Reform Act of 2006 (Wikipedia, 2009).

Another regulatory body whose primary purpose is to develop the generally accepted accounting principles is the FASB. The FASB is a private not-for-profit organization and was designated by the SEC to create and enforce the rules and regulations of the GAAP. The…...

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