Question

does the sec have more authority or less authority than the fasb with respect to standard setting? explain the relationship between the sec and the fasb.

Answer 1

The SEC has more authority than the FASB with respect to standard setting.

Step-by-step explanation:

The Securities and Exchange Commission (SEC) and the Financial Accounting Standards Board (FASB) are both important regulatory bodies in the United States. However, in terms of authority, the SEC has more authority than the FASB with respect to standard setting.

The SEC is a federal agency established by the Federal Securities Act. It oversees and enforces regulations related to the disclosure of information for publicly traded securities, such as stocks and bonds. The SEC has the power to establish financial reporting and accounting standards for public companies and has the authority to enforce compliance with these standards.

On the other hand, the FASB is a private, non-profit organization that is responsible for setting accounting standards for non-governmental entities. Its primary role is to establish Generally Accepted Accounting Principles (GAAP) in the United States. While the FASB's standards are influential, they are subject to SEC oversight, and the SEC has the authority to reject or modify the FASB's standards if they are not consistent with the SEC's requirements.