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Checkpoint: Regulatory Bodies

Claire Rourk Skinner


April 4, 2011

Sergio Perez

There are two major financial regulatory bodies in the United States that deal with accounting. Regulatory bodies are systems that have been put in place to protect investors from accounting fraud in companies.

The first one is the Securities and Exchange Commission (SEC) which stems from the Securities Exchange act of 1934. Previous to the act there was not much support for federal regulation of the securities market (U.S. Securities and Exchange Commission, 2011). After the infamous stock market crash in 1929, boosted by public requirement, congress implemented the act of 1934 that created the SEC. In order to protect investors of all kinds, the SEC works with companies to ensure they comply with the regulations and that all investors have equal and fair access to the market.

The next one is the Federal Trade Commission (FTC). Created in 1914, the FTC was intended to maintain fair commerce practices. According to Federal Trade Commission (2011): 

“The FTC pursues vigorous and effective law enforcement; advances consumers’ interests by sharing its expertise with federal and state legislatures and U.S. and international government agencies; develops policy and research tools through hearings, workshops, and conferences; and creates practical and plain-language educational programs for consumers and businesses in a global marketplace with constantly changing technologies.” (para. 2).

The regulatory agencies are important because they create and maintain fairness in accounting, the securities market, and financial dealings in the United States. Without these agencies, there could be extreme accounting fraud and the economy would be severely unbalanced.


Federal Trade Commission. (2011). Federal Trade Commission. Retrieved from

U.S. Securities and Exchange Commission. (2011). U.S. Securities and Exchange...