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Accounting Standards

  • Date Submitted: 07/27/2011 09:41 PM
  • Flesch-Kincaid Score: 54.5 
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|One entity that looks over accounting firms is the Public Company Accounting Oversight Board (PCAOB). They are a corporation that was started by Congress to audit accounting firms and to also protect the interest of investors. In July 30, 2002 PCAOB was established to be able to audit and fine firms. They also oversee firms to prevent fraud and to make sure that firms are up to date and are practicing good services. (Auditing, 2003-2011)
Some of the powers that PCAOB has are allocate, assess, and collect accounting support fees that fund the board; conduct investigations and disciplinary proceedings concerning, and impose appropriate sanctions were justified upon, registered public accounting firms and associated persons of such firms (including fines of up to $100,000 against individual auditors, and $2 million against audit firms; sue and be sued, complain and defend, in its corporate name and through its own counsel, with the approval of the SEC, in any Federal, State or other court. Although a U.S. organization they have the jurisdiction to also control out of country firms that have affect on U.S. clients and their investments.   (Auditing, 2003-2011)
Another entity that oversees accounting firms is the U.S. Securities and Exchange Commission (SEC). Established in 1934 during the Great Depression the enabled the Securities Exchange Act of 1934 which is what started the organization. They were mainly created to give investors and brokers piece of mind to that their money and investments were going to be safe during those hard times. They provided a safer and reassuring way to handle business by regulating the firms with auditing. (What we do, 2011)
The laws that control the organization are Securities Act of 1933, Securities Exchange Act of 1934, Trust Indenture Act of 1939, Investment Company Act of 1940, Investment Advisers Act of 1940, Sarbanes-Oxley Act of 2002. These laws are what set the standards for the accounting firms and also the rules they are...

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