Question

Accounting standard setting in the United States is

a) Done primarily by the Securities and Exchange Commission
b) Done primarily by the private sector
c) The responsibility of the public sector
d) Done primarily by the International Accounting Standards Committee

Answer 1

Accounting standard setting in the United States is primarily done by the private sector through the Financial Accounting Standards Board (FASB).

Step-by-step explanation:

The correct answer is b) Done primarily by the private sector. Accounting standard setting in the United States is primarily done by the private sector. The Financial Accounting Standards Board (FASB) is the main organization responsible for setting accounting standards in the United States. The FASB is a private, nonprofit organization that operates independently from the government.

One of the reasons accounting standard setting is done by the private sector is to ensure that the standards are developed by experts in the field with industry-specific knowledge and experience. This allows for more effective and efficient standard setting that takes into account the needs of different industries and stakeholders.

Additionally, the private sector setting accounting standards promotes transparency and fair representation of financial information, which is important for investors and other stakeholders in making informed decisions.