Question

Regarding financial accounting for public companies, the role of the Securities and Exchange Commission (SEC) as currently practiced is to ___________.A. Regulate financial disclosures for corporate, state, and municipal reporting.B. Make rules and regulations pertaining more to disclosure of financial information than to the establishment of accounting recognition and measurement principles.C. Develop and promulgate most generally accepted accounting principles.D. Make rules and regulations regarding filings with the SEC but not to regulate annual or quarterly reports to shareholders.

Answer 1

Answer:

Make rules and regulations pertaining more to disclosure of financial information than to the establishment of accounting recognition and measurement principles.

Explanation:

The SEC is primary involved in regulating the external financial reporting activities like financial disclosures. The FASB is primarily.concerned with the establishment of accounting recognition and measurement principles.

Answer 2

Answer:

C. Develop and promulgate most generally accepted accounting principles.

Explanation:

The Securities and Exchange Commission (SEC) does have the authority to control financial reporting from outside. It has decided to allow the accounting profession (via the FASB) to set principles.

It has appointed the FASB as the body responsible for implementing public company accounting standards in the US. On 1 July 1973, the FASB replaced the board of accounting principles (APB) of the American Institute of Certified Public Accountants (AICPA)