Acc 300, Principles of Accounting - Accounting Regulatory Body

Accounting Regulatory Body

Eduardo Mateus

University of Phoenix

ACC 300, Principles of Accounting

Kris Tontis (FAC)

June 26, 2007

Accounting Regulatory Body

The overall responsibility and accountability of a business' finance and accounting systems depends on how efficiently its accounting governing body works. The businesses in United States use the generally accepted accounting principles (GAAP) to compile their financial statements. Furthermore, most countries in the world use accounting principles similar to GAAP. In my opinion the GAAP is fundamentally the most important accounting governing body.

The GAAP is a very important accounting regulatory body because it is used by several countries in the world to regulate their accounting systems. 'The common set of accounting principles, standards and procedures that companies use to compile their financial statements. GAAP are a combination of authoritative standards (set by policy boards) and simply the commonly accepted ways of recording and reporting accounting information.'(Investopedia.com). In other words, GAAP is a standard set of guidelines or principals for finance and accounting, which, accountants and managers are supposed to follow whenever recording transactions, and in the preparation of financial statements. Therefore, the GAAP have a specific meaning for accountants, auditors and managers for the reason that it provides the necessary standards, rules, regulations to prepare accurate financial statements.

The international Accounting Standards Board (IASB) was founded 2001 to replaces the International Accounting Standards Committee (IASC). "The IASB is a London, UK based organization. IASB is an independent, privately-funded accounting standard-setter based in London" (Value Based Management.net, 2007). The IASB Board members come from nine different countries and have thus they have a variety of functional backgrounds. Organizations dealing in International business should to comply with the accounting standards of this regulatory body. Therefore, in order fulfill the IASB requirements, companies have to file financial results according to International Financial Reporting Standards (IFRSs) as approved by the IASB

Another accounting regulatory body is the Securities and Exchange Commission (SEC) which is an agency of the United States government that keeps an eye on financial markets and standard-setting bodies such as the Financial Accounting Standards Board (FASB). Since SEC is an US Government agency, it has primary responsibility for enforcing the federal securities laws and regulating the securities. The (SEC) also helps to control the markets and sets accounting