In 1934, the United States government created the Securities and Exchange Commission (SEC). At the time, the country was still suffering from the 1929 market crash. The SEC applies mainly to publicly held companies helping them maintain fair and orderly markets.
The SEC was designed to reduce the amount of fraud and the potential for mis-statements in the financial community. By doing so, the level of investor confidence is increased. This means that the more investment that is fueled into the economy, the greater the economic expansion. By regulating the markets and providing oversight, it helps to ensure a fair market. The SEC works directly with other authoritative bodies to enforce regulations. For example, the SEC and the Public ...
This solution discusses accounting and SEC regulations as a means to prevent financial fraud. References are also provided.