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The success of a company is very dependent upon its financial accounting. In accounting there are numerous Regulatory bodies that govern the accounting world. These companies are extremely important to a company because they set the standards when it comes to the language and decision making of a company. These regulatory bodies can be structured as agencies, associations, commissions, and boards. Without companies like the Security and Exchange Commission (SEC), The Financial Accounting Standards Board (FASB), the Governmental Accounting Standards Board (GASB), Internal Accounting Standards Board (IASB), Internal Revenue Service (IRS), and other regulatory bodies a company could not make well informed decisions. In this paper the author will look at only four of them.
Security and Exchange Commission (SEC)
The first one of the organizations that is responsible for assisting and overseeing companies is the Security and Exchange Commission (SEC). “The mission of the U.S. Securities and Exchange Commission is to protect investors, maintain fair, orderly, and efficient markets, and facilitate capital formation” (SEC 2008, ¶ 1). Basically it is the SEC’s job to interpret the laws that congress passes and assist companies in implementing these laws. While Congress makes modifications to laws it is this companies job to also make all companies aware of these changes and help them to make a smooth transition into using the newly amended law.
The Financial Accounting Standards Boards (FASB)
The second organization was designed by the SEC in 1973. The FASB was designed with the purpose of creating financial accounting and reporting standards for the public. “The mission of the FASB is to establish and improve standards of financial accounting and reporting for the guidance and education of the public, including issuers, auditors, and users of financial information” (FASB n.d. ¶ 3). The FASB is designed much like the FASB in which they are to protect the public from fraud and misleading information from the company.
Internal Accounting Standards Board (IASB)
The third organization that helps to regulate the accounting standards is the IASB. “Our mission is to develop, in the public interest, a single set of high quality, understandable and international financial reporting standards (IFRSs) for general purpose financial statements”(IASB 2008,¶ 1). The IASB consists of a board that is made up from nine different countries with the sole purpose of expanding accounting standards. Their main hope and goal is to one day that there will be only one set of accounting standards that will be used throughout the world.
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The Governmental Accounting Standards Board (GASB)
The fourth organization that assists as a regulatory accounting body is the GASB. “The mission of the Governmental Accounting Standards Board is to establish and improve standards of state and local governmental accounting and financial reporting that will result in useful information for users of financial reports and guide and educate the public, including issuers, auditors, and users of those financial reports” (GASB 2008, ¶1). This is basically a subdivision of the SEC that is designed for governmental accounting reporting between private companies and the state and local governments.
While the Security and Exchange Commission (SEC), the Governmental Accounting Standards Board (GASB), Internal Accounting Standards Board (IASB), the Financial Accounting Standards Boards (FASB) are among the top organizations that are in charge or regulating the accounting industry. Some of these companies have additional organizations or subdivisions underneath them that has the sole purpose of regulating the accounting standards and reporting. Each regulatory body plays an important key role in the financial reporting and helps to implement the rules of honesty. By doing this it prevents companies from doing dishonest financial acts that could in some ways be very harmful and detrimental to the company and business industry.
Financial Accounting Standards Board – FASB (Date unknown). The Mission of the Financial Accounting Standards Board. Retrieved October 6, 2008 from URL: http://www.fasb.org/facts/index.shtml#mission
The Governmental Accounting Standards Board – GASB (2008). Welcome Page. Retrieved October 6, 2008, fromURL: http://www.gasb.org/
Internal Accounting Standards Board – IASB (2008)About Us. Retrieved October 6, 2008, from URL: http://www.iasb.org/About+Us/International+Accounting+Standards+Board+-+About+Us.htm
Security and Exchange Commission – SEC (05/05/2008) The Investor's Advocate: How the SEC Protects Investors, Maintains Market Integrity, and Facilitates Capital Formation. Retrieved October 6, 2008 from URL: http://www.sec.gov/about/whatwedo.shtml