Question

The role of the Securities and Exchange Commission (SEC) in the formulation of accounting standards can be best described as1. it allows the FASB to develop all accounting standards by itself.2. varied - the SEC relies on FASB to develop standards but gives advice and recommendations to the private sector as needed.3. non-existent.4. it develops all accounting standards by itself.

Answer 1

Answer:

2. Varied- the SEC relies on FASB to develop standards but gives advice and recommendations to the private sector as needed.

Explanation:

The FASB, Financial Accounting Standards Board is an independent non- profit organization, formed in 1973, that is tasked with establishing accounting as well as financial reporting standards for profit and nonprofit organizations in the USA. It also has the authority to interpret generally acceptable accounting principles for private and public companies in preparation of financial reports and presentation of such reports. The SEC like every other organization, relies on the FASB to formulate rules and regulations (standards) for public companies mainly while giving private companies recommendations. The FASB is recognized by state accounting boards such as AICPA (American Institute of Certified Public Accountants) among other accounting boards.

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