Accounting Regulatory Bodies Paper
explanatory Essay
721 words
Accounting Regulatory Bodies Paper
Introduction
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.
In this essay, the author
- Explains that the success of a company is dependent upon its financial accounting. regulatory bodies govern the accounting world.
- Explains that the security and exchange commission (sec) is responsible for assisting and overseeing companies.
- Explains that the fasb is designed to establish and improve standards of financial accounting and reporting for the guidance and education of the public.
- Describes the iasb as a third organization that helps to regulate accounting standards. the board is made up of nine different countries with the sole purpose of expanding accounting standard.
- Explains the mission of the governmental accounting standards board, which is to establish and improve standards of state and local governmental accounting and financial reporting.
- Explains that the security and exchange commission (sec), the governmental accounting standards board (gasb), iasb, and financial accounting standard boards regulate the accounting industry. each regulatory body implements the rules of honesty.
- Explains the mission of the financial accounting standards board.
Related
- opinion
- explanatory
- Case 8-2: Whither The Withering Standard Setters?opinion essayThere are a number of comparisons between the IASB and the FASB. The IASB is an organization whose design was based upon that of the FASB. Therefore, the process used by both is similar in establishing accounting standards. Those appointed to either board only sit for one term of five years. The meetings of the organizations are made public knowledge and are publically held. Committees and people internal to these organizations decide where to focus the efforts of the respective organizations. Both boards conduct research of subjects presenting the positives and negatives of said, but in the IASB this is accomplished in working groups, whereas in the FASB they utilize employed p...
In this essay, the author
- Explains choi, frederick d. s., and gary k. meek. international accounting. 7th ed. boston: prentice hall, 2011.
- Compares the iasb and the financial accounting standards board (fasb).
- Explains why other organizations pay close attention to the convergence of ifrs and u.s. gaap, and the influence that they have globally in national accounting standards.
- Explains that u.s. accountants, analysts, and others involved in financial reporting need to know about ifrs.
- Opines that neither the iasb nor the fasb will simply vanish, nor do they see it as the accepted standard around the world.
1051 wordsRead More - The SECexplanatory essay(SEC 2012) “The mission of the U.S. Securities and exchange commission is to protect investors, maintain fair, orderly and efficient markets, and facilitate capital formation.”
In this essay, the author
- Explains the difference between intentional tort and negligence.
- Explains that bank of america, n.a. member fdic.
- Explains how the sec protects investors, maintains market integrity, and facilitates capital formation.
- Explains that the securities act of 1934 empowered the sec to do periodic evaluation of reports from companies that publicly trade their securities.
- Explains that tort interference with contractual relations protects the right to enjoy the benefits of legally binding agreements.
1316 wordsRead More - Sarbanes Oxley Act of 2004explanatory essaySarbanes-Oxley consisted of 11 different titles or sections. Title I is Public Company Accounting Oversight Board. It created a five member panel known as the Public Company Accounting Oversight Board, overseen and appointed by the Securities and Exchange Commission (Sarbanes-Oxley). The Board is to consist of two CPAs and three people that are not CPAs, but the chairman must be a CPA. The Board is to provide oversight of auditing of public companies while establishing auditing, quality control, independence, ethical standards (Arens 32-33). Public accounting firms that work on audits must register with the Board and pay a fee. Title I also included new auditing rules. Auditors must now retain paper work for seven years, have a second partner review and approval of audit reports, evaluate whether internal controls accurately show transactions as well as sales of assets, and describe any weaknesses or noncompliant internal controls. Public accounting firms that issue auditing reports for more than 100 companies are to be inspected every year. Accounting firms that issue audit reports for less than 100 companies must be inspected very three years. The Board can discipline or sanction accounting firms for what it deems to be negligent conduct (Conference of State Bankers Online).
In this essay, the author
- Explains that the sarbanes-oxley act of 2002 was signed into law on july 30, 2002 by president bush.
- Explains that sarbanes-oxley included 11 different titles or sections. title i is public company accounting oversight board, overseen and appointed by the securities and exchange commission.
- Explains that the sarbanes-oxley act creates new rules that auditors must abide by in order to keep their objectivity and accuracy.
- Describes the requirements of the sarbanes-oxley act.
1715 wordsRead More - Public Corporationsexplanatory essayThe United States Securities and Exchange Commission (SEC) is an agency of the United States federal government that holds the primary responsibility for the enforcement of federal security laws, regulation of the security industry, nations stock and opinion exchanges and other activities and organizations including electronic markets in the United States (The Laws That Govern the Securities Industry, 2014).
In this essay, the author
- Explains that the securities and exchange commission (sec) is an agency of the united states federal government that holds the primary responsibility for the enforcement of federal security laws.
- Explains that the united states securities and exchange's main mission is to protect investors, maintain order and efficient markets, and facilitate capital formation.
- Explains that mergers have been done due to convergence of high concentration of more profits, slowing economy, cuts in government funding and government scrutiny which has mostly contributed to merger rush.
- Explains that mergers of corporations have some benefits, such as better customer service, better integration of existing services, and leverage on each organization's strengths to enhance service delivery capabilities.
- Explains that amazon operates globally as the world leader in electronic commerce through online purchases, due to its strong user shopping experience where the user can quickly find and purchase products.
- Explains that amazon acquired the zappos company through acquisition which was also engaged in e-commerce mainly due to many customers loyalty.
- Explains that nokia gained from the merger due to the cleverly blended hardware and software’s in new ways and its ability to reach new markets with different products.
- Explains that flipkart had an intended merger with myntra to which they were to remain separate entities after the merger happened. they wanted to give competition to amazon.
- Explains that the ball corporation does not have a history of mergers and acquisitions, but has subsidiary corporations under it.
- Explains that king arthur flour company is an american company that provides pure, high-quality flour for residents of the united states as it offers top quality baking products.
- Explains that companies that are not acquired or merged tend to have some advantages as compared to the ones which are combined. mergers often bring about drawbacks like dilution of operational skills, time consumption for conducting the merger process, uncertainity about the future funding for various programs.
- Opines that amazon's acquisition of zappos by amazon was a wise move due to the need to have an edge over most other traditional big box retailers.
- Opines that amazon gets a potential four win scenario here — good valuation, elimination of growing competitor, growth of egm 20%, and cements leadership position in big category.
- Explains that a corporation operating internationally must evaluate its international business level strategy and international corporate strategy on how it reaches the market.
- Explains that business done based on this approach where there is international trade is mainly carried through the understanding of cultural barriers, linguistic, political barriers and complexities involved.
- Explains that the business level strategy is coined on the various philosophies being industry based, resource-based (specific differences) and institution-oriented. to achieve average returns due to its global network of market, the firm needs to look at the forces of competition.
- Explains the need for production of different, unique goods and services to ensure they do not lose value on hand. they emphasize low cost and differentiation between the products and those of the competitors.
- Opines that there is need to employ the international corporate strategy to ensure efficiency on their goods and services.
- Argues that the above calls for the global strategy where a firm sacrifices response to local requirements with each of its markets in favor of emphasizing efficiency through modification of their products and services.
- Recommends the corporation that operates international business to fast track its sale of goods and services. they recommend the need to elevate and understand the different factors of production.
- Explains that a corporation should have more than one corporate strategy that coordinates different business levels so that none of the consumer level strategies goes against it.
- Explains that the focus strategy is an integrated set of actions that are taken to provide goods and services of particular competitive value.
- Explains that on the business level strategy consideration can be made industry based strategy where consideration is made with regard to a particular industry.
- Cites amazon's careers homepage and mcgaughan, p. a. (2005). mergers: what can go wrong and how to prevent it.
1506 wordsRead More - The Purpose of Accountingexplanatory essayThe purpose of this document is to describe the nature, purpose and scope of accounting and it deliberately explains the details of each category in accounting. Accounting involves in preparing financial documents of an entity by analyzing, verifying, and reporting this records. It emphasizes its major characteristic role in field of banking and finance, with a mixture of supportive sub topics.
In this essay, the author
- Explains that the purpose of this document is to describe the nature, purpose, and scope of accounting. accounting involves in preparing financial documents of an entity by analyzing, verifying, reporting this records.
- Explains the main view of this report is to explain how the accounting plays a major role in banking, finance and other sectors of business.
- Explains that the accounting of business is used to record and measure the size of the business, in terms of gains and losses on monthly, quarterly semi-annual and annual basis.
- Explains that accounting in business follows a particular process either in small scale business or large scale businesses with step by step process.
- Explains that in management, the accountant gives advices to individuals and business people, how to manage their business. account information is considered and some business decisions are taken in both financial and non-financial departments.
- Explains that tax accounting is involved in filing the tax returns of the company individually, based on their income, and they need to pay the percentage accordingly to tax rules. taxation on business is another source of income to meet and satisfy the necessary needs.
- Explains that financial accountant prepares monthly, quarterly, semi-annual, and annually financial reports to see the business development. these reports are useful for creditors to decide whether to invest in the company.
- Explains that a budget analyst develops, executes and analyzes budgets for public, private, and nonprofit organizations.
- Explains that auditors audit accounts and verify that all financial reports and statements are correct. in case of unmatched consequences, the organization needs to give explanation on the misrepresentations of wrong statements.
- Explains that accounting plays a major role in developing and growth of the business. financial standards are expected as the complexities of business growth and expansion.
632 wordsRead More - Audits and Avoiding Mismanagement of Fundsexplanatory essayGeneral accepted accounting principles (GAAP) are considered to be the framework guidelines for financial accounting and jurisdiction of all accounting standards. The (GAAP) includes standards, conventions and the rules that the organization accountant follows when recording and summarizing all the transactions when preparing the financial statements. Third parties that are involved with the reports rely on the information to be free from bias and inconsistency without debate. All business states that, “generally accepted accounting principles are guidelines precisely, are a group objectives and conventions that have been established over time to set how financial statements are prepared and presented (Corporate Government 2010). There is a precedence that takes place when dealing with the finances of different organization. The organizations that deal with any type of financial data must comply with GAAP standards so that outside creditors can view their financial statements with little or no difficulty. For example Financial Accounting Standards (FASB) is private not-for-profit organization that oversees the majority of the different organizations within the United States including the healthcare industry.
In this essay, the author
- Explains that the u.s. security and exchange commission (sec) oversees all organizations not excluding the healthcare organizations.
- Explains that all health care organizations operate differently and with different methods, each needs to look at their own code of ethics when handling the corporation's business affairs.
- Explains that the health care industry is full of many risks, from patients all the way to the financial risks involved. health care organizations have both state and federal guidelines and standards.
- Opines that balancing a budget and being in compliance with federal laws are the meat and potatoes of health care organizations.
- Explains that health care financial management plays a key part of financial planning. keeping accurate financial records keeps the organizations free from audits and mismanagement of funds.
923 wordsRead More - Accounting Codificationexplanatory essayGAAP principles have received a lot of support from substantial authorities. The AICPA’s code of conduct directs that its members should prepare their financial statements based on GAAP guidelines. For example, AICPA Rule 203 forbids a member from articulating an unprofessional opinion on financial statements that have deviated from adhering to GAAP principles. GAAP principles come from the several organizations. It is composed of a combination of more than 2,000 documents that have been used for approximately 60 years or so. It incorporates such items as FASB Standards Staff Positions and interpretations; APB inputs; and AICPA Research reports. A differing format in the documents that comprise GAAP, inconsistency and difficulty in interpretation make financial preparers to be unsure whether they have the right GAAP. This makes it hard for them to determine whether what they have prepared is authoritative or not. These facts led FASB to develop the FASB accounting standards codification or
In this essay, the author
- Explains that the aicpa's code of conduct directs that its members should prepare their financial statements based on gaap guidelines.
- Explains the purpose of codification, which is to change gaap documentation, presentation, updates, and introduce a new, organized, more accessible and user-friendly structure.
- Explains that pcaob is a non-profit body formed in 2002 by congress’s sarbanes-oxley act. it was created in response to fraudulent and misleading accounting practices by various companies.
- Explains that the pcaob conducts inspection on audit files of selected engagements, which introduces a new form of accountability within auditing firms.
- Explains that tax standards of conduct and ethics highlight tax professionals' role as a client advocate. however, auditing standards require auditors to maintain independence from their clients and avoid client advocacy.
- States that the pcaob report acknowledges the significance of auditing business to an economy that has thrived.
- Explains that pcaob had not set generally accepted accounting standards, but when fasb came up with their gaap, they created their own standards.
- Explains that codification was developed to simplify the users’ access to u.s gaap. each area in codification represents a broad category of related guidance.
1026 wordsRead More - International Financial Reporting Standardsexplanatory essayThe globalization of business has resulted in the need for compatible accounting standards that can be used internationally for financial reporting. As a result, the International Financial Reporting Standards (IFRS) were developed by the International Accounting Standards Board (IASB) to unify the various financial reporting methods and create a single accounting standard which can be applied to any financial statement worldwide (Byatt). The global standardization of financial reporting will increase the readability and enhance comparability of globally traded companies’ financial statements, without the need of conversion or translation. There are a few main differences between the International Financial Reporting Standards (IFRS) and the U.S. Generally Accepted Accounting Principles (U.S GAAP). The increasing recognition and acceptance of the International Financial Reporting Standards by accounting professionals in the United States, will affect the way in which the U.S will record financial statements in the future.
In this essay, the author
- Explains that the international financial reporting standards (ifrs) were developed by the iasb to unify the various financial reporting methods and create a single accounting standard which can be applied to any financial statement worldwide.
- Explains the main differences between the current u.s. gaap reporting and ifrs reporting including revenue recognition, inventory valuation, reporting assets, accrued expenses and the preparation of the statement of cash flows.
- Explains the difference between u.s gaap and ifrs in the valuation of long-term assets and the disclosure of accrued expenses.
- Opines that the u.s will adopt ifrs but not in its complete form, as they will likely provide provisions and amendments to accustom the united states.
- Opines that the international financial reporting standards are becoming the universal standard for the preparation of financial statements. the ifrs will have a significant impact on financial reporting in the united states.
- Explains the financial accounting standards board's position on ifrs and gaap. feeley & driscoll.
1068 wordsRead More - Generally Accepted Accounting Principlesexplanatory essayThere are general rules and concepts that preside over the field of accounting. These general rules, known as basic accounting principles and guidelines, shape the groundwork on which more thorough, complex, and legalistic accounting rules are based. The Financial Accounting Standards Board (FASB) uses the basic accounting principles and guidelines as a foundation for their own comprehensive and complete set of accounting rules and standards.
In this essay, the author
- Explains that items more than ten percent of income from continuing operations would usually be considered material by all groups.
- Explains that items that have less than a four or five percent effect would usually be considered immaterial by all groups.
- Explains that basic accounting principles and guidelines shape the groundwork on which more thorough, complex, and legalistic accounting rules are based.
- Explains that accounting theories and the generally accepted accounting principles are important in the accounting discipline since they are the rules by which things are supposed to be done.
1219 wordsRead More - Role and Evolution of The International Accounting Standards Boardexplanatory essayRole and Evolution of The International Accounting Standards Board The International Accounting Standards Board, (IASB), began life as the International Accounting Standards Committee (IASC) in the 1973. The IASC was created in June 1973 as a result of an agreement by the accountancy bodies of Australia, Canada, France, Germany, Japan, Mexico, the Netherlands, the United Kingdom and Ireland and the United States. These countries constituted the Board of IASC at that time. The international professional activities of the accountancy bodies were organized under the International Federation of Accountants (IFAC) in 1977.
In this essay, the author
- Explains the role and evolution of the international accounting standards board (iasb). the iasc was created in june 1973 by the accountancy bodies of australia, canada, france, germany, japan, mexico, the netherlands, united kingdom, ireland, and the united states.
- Explains that the international professional activities of the accountancy bodies were organized under the international federation of accountants (ifac) in 1977.
- Explains that the main objective of the iasc was the development of international accounting standards, in an effort to reduce the differences in accounting practices across countries.
- Explains that the iasc started with the ten board members above but gradually expanded this number and added associate members along the way. the organization began to pay visits to national standard-setters in its efforts to reduce the diversity of financial reporting practices.
- States that the iasb's goal is to develop global accounting standards with the objective of having one set of standards that are relevant for creditors, investors and decision makers.
- Explains that the iasb is structured in committees designed to analyze past standards and pronouncements and draft new ones.
- Explains that the iasb recognizes that integrity and independence are core competencies of the accounting profession and that strong ethical values are a must for accountants.
- Explains that the iasb is not just reactionary, but has established an ethics committee whose goal is to promote ethical behavior and reports directly to the board.
693 wordsRead More