Regulatory Agencies

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Regulatory Agencies


This paper focuses on the four major accounting regulatory bodies which are responsible to monitor the financial reporting of the companies. Each accounting regulatory body has diverse purpose so that they can witness increasing attention to the issue of international harmonization of accounting. They have proper standards specify different approaches to solve a problem that arises in accounting, defining rules and procedures of recording business transactions, and enterprise funds of different nature of business. Furthermore, this paper discusses the current literature regarding the accounting regulatory body (SEC, FASB, IASB and GASB) and their accounting standard setting process and financial presentation between these regulatory agencies. Accounting Standard Setting


The purpose of this paper is to draw readers' attention to some of the differences between SEC, FASB, IASB and GASB standards process and financial presentation necessary to define the transition from one set of accounting principles to others. The below comparison will help professionals in possession of a reporting system to identify areas for study and professional development during the transition to other accounting standards, as well as heads of departments reporting to determine the necessary knowledge for their employees.


Accounting rules are binding sets of rules, procedures and standards that are applied in practice in order to achieve full, clear, reliable and useful financial results.

Securities and Exchange Commission - SEC

SEC - Securities and Exchange Commission is the federal U.S. regulatory and supervision of financial markets and imposes federal securities laws. Securities and Exchange Commission has an authority to developed accounting standards for publically traded companies. SEC has defined certain accounting guidelines for publically traded companies which refer to Generally Accepted Accounting Principles or GAAP. GAAP consist of the guideline regarding the fair accounting practices for public companies (

SEC financial presentation comprises of:

Presentation of Balance Sheet

Presentation of Income Statement

Presentation of Cash Flows Statement

Presentation of Statement of Shareholder Equity

Presentation of Notes to Financial Statements

Companies following GAAP should include the above mention financial presentation in the annual report.

Financial Accounting Standards Board - FASB

FASB - Financial Accounting Standards Board is an elected organization od U.S. private sector for establishing financial accounting standards that governs the financial preparation reports for non-governmental entities. The FASB accomplishes its mission which is to improve the financial standard of nongovernmental entities through a comprehensive and independent participation that promotes comprehensive, objective account of all stakeholders' views and subject to the supervision of the Trustees of the Financial Accounting Foundation (

 International Accounting Standards Board - IASB

It is the international body responsible for the development of standards with international accounting IAS / IFRS. The IASB is a private organization with headquarters in London. The main objective of the accounting standard setting process is to create rules that serve as a framework for high quality and transparent financial reporting. The accounting rules are set under the ultimate authority of the Securities and Exchange Commission - SEC, who delegated the accounting rule development to the private sector. The International Financial Reporting Standards (IFRS) are published by the International ...
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