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Governing authorities over financial reporting

You have recently hired several new members to your team who will be assisting with financial statement analysis for your clients. As part of their training, you want to make sure that they fully understand the requirements of the SEC regarding financial reporting and the tools available to analyze the financial performance of a firm.

Explain all of the following:
- Outline the governing authorities over financial reporting (SEC, FASB, GASB, Etc...)
- Outline the financial reporting requirements of the SEC
- Describe 2 tools one could use to analyze the financial performance of a firm
- Describe the tools
- Explain how each might be useful in the analysis

500 to 750 words with references please.

Solution Preview

The governing bodies over accounting in the United States includes the SEC. The Securities and Exchange Commission is an agency of the US federal government. It holds main responsibility for enforcing the federal securities laws and regulating the securities industry. The SEC enforces a large number of laws such as the Securities Act of 1933, the Investment Advisers Act of 1940 and the Sarbanes-Oxley Act of 2002. Another governing body over accounting in the US is the Financial Standards Board. This is the organization in the private sector that sets standards of financial accounting that govern the preparation of financial reports by nongovernmental entities. The standards of the FASB are accepted by the Securities and Exchange Commission. Similarly, the Governmental Accounting Standards Board is the independent organization that sets and improves standards of accounting and financial reporting for the Federal, State, and local governments. The GASB is recognized by the governments, the accounting industry, and capital markets as the official source of generally accepted accounting principles for state, local, and federal government (1). ...

Solution Summary

Financial reporting is explained in a structured manner in this response. The answer includes references used.

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