Checkpoint: Regulatory Bodies

There are nine major accounting regulatory bodies in the United States. The first and primary body is the Internal Revenue Service (IRS), a bureau of the United States Department of the Treasury. Its primary function is to impose tax laws and collect taxes from taxpayers. Another important regulatory body is the Securities Exchange Commission (SEC). The function of this body is to enforce Generally Accepted Accounting Principles (GAAP) within public companies. Their goal is to maintain fairness and efficiency amongst public markets. The Financial Accounting Foundation (FAF) is an organization that creates standards for financial accounting by handling administration and finances for the Financial Accounting Standards Board (FASB) and the Governmental Accounting Standards Board (GASB). The FAF oversees operation of these two very important standard creating boards that create standards on state, local, and governmental levels. The Financial Accounting Standards Advisory Board (FASAB) was created to produce GAAP for the federal government. The International Accounting Standards Board (IASB) was developed in 2001 in order to produce GAAP standards globally through an international consultation process with representatives from many countries. The Public Company Accounting Oversight Board’s primary function is to issue auditing standards for public auditing firms. It is a private-sector, nonprofit corporation that oversees public auditors in an effort to protect investors. The final accounting regulatory body is the American Institute of Certified Public Accountants. This is a large organization that works closely with the FASB to create financial accounting standards for all CPA’s. They provide their CPA’s with resources, information and leadership in an effort to help them provide top quality services to the public.