Week 1 DQ 1 Due Tuesday Day 2 Go to the U S Securities and Exchange Commission s Web site at http www sec gov and the Financial Accounting Standards Board s Web site athttp www fasb org Identify the mission and main activities of each organization Then analyze the similarities and differences between the roles of each entity Which entity has more influence over financial statement reporting Explain your answer According to the SEC website their mission is to protect investors maintain fair orderly and efficient markets and facilitate capital formation The SEC also requires public companies to disclose meaningful financial and other information to the public This provides a common pool of knowledge for all investors to use to judge for themselves whether to buy sell or hold a particular security The SEC is concerned primarily with promoting the disclosure of important market related information maintaining fair dealing and protecting against fraud According to the FASB website the mission of the FASB is to establish and improve standards of financial accounting and reporting that foster financial reporting by nongovernmental entities that provides decision useful information to investors and other users of financial reports Since 1973 the Financial Accounting Standards Board FASB has been the designated organization in the private sector for establishing standards of financial accounting that govern the preparation of financial reports by nongovernmental entities The major difference in the SEC and the FASB is that the SEC deals with reporting of financial statements for all industries while the FASB deals mainly with the private nongovernmental entities Both are concerned with the fairness of financial reports and work in the interest of the public I believe that the SEC has more influence over financial statement reporting because they can bring civil action against companies and individuals for violations of securities laws Although according to the FASB website the Commission s policy has been to rely on the private sector for this function to the extent that the private sector demonstrates ability to fulfill the responsibility in the public interest Response 2 Go to the U S Securities and Exchange Commission s Web site at http www sec gov and the Financial Accounting Standards Board s Web site athttp www fasb org Identify the mission and main activities of each organization Then analyze the similarities and differences between the roles of each entity Which entity has more influence over financial statement reporting Explain your answer U S Securities and Exchange Commission SEC According to the SEC s website The mission of the U S Securities and Exchange Commission is to protect investors maintain fair orderly and efficient markets and facilitate capital formation U S Securities and Exchange Commission 2010 Para 1 The main activities of the SEC are to interpret federal securities laws issue new rules and amend existing rules oversee the inspection of securities firms brokers investment advisers and ratings agencies oversee private regulatory organizations in the securities accounting and auditing fields and coordinate U S securities regulation with federal state and foreign authorities U S Securities and Exchange Commission 2010 Financial Accounting Standards Board FASB According to the FASB s website The mission of the FASB is to establish and improve standards of financial accounting and reporting that foster financial reporting by nongovernmental entities that provides decision useful information to investors and other users of financial reports That mission is accomplished through a comprehensive and independent process that encourages broad participation objectively considers all stakeholder views and is subject to oversight by the Financial Accounting Foundation s Board of Trustees Financial Accounting Standards Board n d Para 3 The main activities of the FASB are to identify financial reporting issues based on requests recommendations from stakeholders or through other means The FASB Chairman decides whether to add a project to the technical agenda after consultation with FASB Members and others as appropriate and subject to oversight by the Foundation s Board of Trustees The Board deliberates at one or more public meetings the various reporting issues identified and analyzed by the staff The Board issues an Exposure Draft to solicit broad stakeholder input In some projects the Board may issue a Discussion Paper to obtain input in the early stages of a project The Board holds a public roundtable meeting on the Exposure Draft if necessary The staff analyzes comment letters public roundtable discussion and any other information obtained through due process activities The Board redeliberates the proposed provisions carefully considering the stakeholder input received at one or more public meetings The Board issues an Accounting Standards Update describing amendments to the Accounting Standards Codification Financial Accounting Standards Board n d Both the SEC and the FASB have the same goals of fairness accuracy and understandability of financial accounting and reporting Both agenecys accomplish these goals in the best interest of the overall public The differences between the SEC and the FASB is that the FASB regulates financial reporting in the private sector of businesses but are subject to the rules and regulations of the SEC and the SEC deals with regulating the financial reporting of publicly held corporations I believe that the SEC has the greatest influence over financial statements reporting because they have the final approval on all changes of the rules and regulations The Sec can also bring civil or administrative enforcement actions against individuals and companies in violation of the securities laws References Financial Accounting Standards Board n d Facts about FASB Retrieved July 15 2010 from Financial Accounting Standards Board http www fasb org facts index shtml mission U S Securities and Exchange Commission 2010 May 3 The Investors Advocate How the SEC Protects Investors Maintains Market Integrity and Facilitates Capital Formation Retrieved July 15 2010 from U S Securities and Exchange Commission http www sec gov about whatwedo shtml Week 1 DQ 2 Due Thursday Day 4 Search the Internet or the Online Library for information about the Sarbanes Oxley Act A useful guide to some of these provisions is located at http www soxlaw com Summarize at least two
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