Accounting practices
The main objective and goal of accounting practices are to provide relevant information which is required in making financial and economic decisions. Financial accounting and reporting, therefore, need to work under the supervision and standards set by accounting regulatory bodies, to provide credible accounting information and reports to their clients. This report focuses on a discussion of the following five accounting regulatory bodies.
SEC- Securities and Exchange Commission
SEC was established through the Americas Securities Act of 1934, aimed at ensuring protection to investors specifically of public companies, efficiency, and integrity within the securities markets. Organizations participating in the trade of securities should tell the fact regarding their businesses, the securities they are engaged in selling, and also the risks associated with investing in securities. Traders such as brokerage organizations will effectively comply with SEC standards by prioritizing investors’ interests above all in the course of securities trading (Glossary, undated.).
PCAOB- Public Company Accounting Oversight Board
The PCAOB is an independent accounting body that was formed in 2002 by the SOX Act, to regulate the conduct of public companies’ auditors. Its main aim is to give protection to investors’ interests as well as public interests from unfair auditing practices by auditors (Bader, 2005). Organizations that carry out auditing functions comply with PCAOB standards through fair auditing practices and providing audit reports which have a high degree of independence. On the other hand, client organizations will comply by ensuring their auditors adhere fully to the generally accepted auditing standards (GAAS).
AICPA- American Institute of Certified Public Accountants
The AICPA is an American professional organization that encompasses all the Certified Public Accountants. The body is usually aimed at the provision of information, resources as well as leadership to its members, so that they can provide the best and valuable services, under high professional standards to their employers, clients, and the public (Glossary, n.d.). Accounting organizations comply with AICPA standards through exercising and portraying credible and reliable CPA skills to their clients and the public in general.
FASB- Financial Accounting Standards Board
The FASB is a private accounting regulatory body whose mandate is to lay down accounting standards and rules to govern the preparation and processing of financial statements, specifically for non-governmental organizations in the USA. The accounting standards are also referred to as generally accepted accounting principles (GAAPs). An organization complies with FASB regulations by following the set rules in accounting practices and activities, specifically in the GAAPs (Glossary, n.d.).
IASB- International Accounting Standards Board
It is an international accounting standards-setter and regulator, which is independent and privately owned, with its base in London, UK. The body has its commitments in developing high-quality accounting standards that are enforceable globally, and require a high degree of transparency in addition to much information in financial accounting as well as reporting. Organizations especially those conducting activities across the borders complies with IASB, through adhering to international laws governing accounting activities as well as the laws within specific states. Organizations should seek to be informed on the current laws and regulations as stipulated by the body, hence ease in complying with its policies. (Glossary, n.d.).
References
- Bader, H. (2005). The Public Company Accounting Oversight Board: An Unconstitutional Assault on Government Accountability.
- Glossary of terms. AICPA Center for Audit Quality. (n.d).