Final answer:
The FASB is responsible for creating financial accounting standards for the private sector, conducting research, and identifying accounting issues. It does not handle governmental accounting issues nor enforce compliance, the latter being the SEC's role.
Step-by-step explanation:
The Financial Accounting Standards Board (FASB) is responsible for setting standards for financial reporting and accounting practices in the private sector. The primary responsibilities of the FASB include identifying financial accounting issues, conducting research to address these issues, and issuing accounting standards known as Generally Accepted Accounting Principles (GAAP). However, it is important to clarify that the FASB is not responsible for addressing governmental accounting issues; that role is filled by the Governmental Accounting Standards Board (GASB). Furthermore, the FASB does not implement standards to ensure compliance. Compliance is generally overseen by regulatory bodies such as the Securities and Exchange Commission (SEC).
For historical context, the Federal Securities Act of May 27 established legal standards for the disclosure of information relevant to publicly traded securities, which laid groundwork for subsequent legislation and the creation of the SEC. The SEC overall plays a pivotal role in regulating the investment industry, ensuring that public companies adhere to the rules established for the benefit of investors and the economy at large.