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Governing authorities over financial reporting

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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.

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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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1. Indicate the activities accounted for in both internal service funds and major enterprise funds. Comment on whether any of these activities could also have been accounted for in a general or other governmental fund.

2. How are the internal service fund activities reported in the government-wide statement of net assets? How are they reported in the proprietary funds statement of net assets?

3. Did any of the internal service funds report significant operating surpluses or deficits for the year? Have any accumulated significant net asset balances over the years that were not invested in capital assets?

5. Do the notes to the financial statements indicate the component units and other related entities that are included within the reporting entity? Do they indicate any units that are not included? Do they explain why these units are included or excluded?

6. How are the component units presented in the government-wide financial statements?

7. How are they presented in the fund statements?

9. What schedules or other information does the government report as required supplementary information (RSI)?

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