Regulatory Bodies

Introduction

Financial accounting by definition requires policing due to the nature of the subject matter. With public exposure and use of the material, several regulatory bodies exist for user protection. These regulatory bodies are structured as commissions, agencies, boards and associations, just to name a few. Most of these bodies require election to hold a particular office and or position. Maintaining independent and uncompromised relationships with the other organizations is a necessity to ensure efficient operations within the system.

SEC

The U.S. organization responsible for overseeing these organizations is the Security and Exchange Commission ("SEC"). It is the mission of the SEC to protect investors, maintain fair, orderly, and efficient markets, and facilitate capital formation. (www.sec.gov, 2007) While congress is responsible for creating and passing securities laws, it is left up to the SEC to interpret and coordinate the implementation of such laws. This is not an easy task and requires a combined effort from several other agencies.

FASB

The Financial Accounting Standards Board ("FASB") was designated by the SEC in 1973 to establish the private sector standards of financial accounting and reporting. (http://www.fasb.org/facts/index.shtml, 2007) As with the SEC, the FASB must operate to protect public users of the various financial reporting documents from fraud and misleading information. The FASB standardization has provided a continuity in financial reports that allow investors to compare financial statements across companies and in some cases, industries.

GASB

While the FASB has authority in the accounting and reporting requirement for public companies, the Governmental Accounting Standards Board's ("GASB") authority focuses on state and local government financial accounting and reporting. The mission of the GASB is to establish and improve standards to result in useful information