Final answer:
The false statement is that the International Accounting Standards Board issues standards that all companies engaging in international business must follow. It is the FASB that issues accounting standards in the U.S., while the SEC oversees financial markets and the PCAOB sets auditing standards.
Step-by-step explanation:
The false statement concerning accounting principles in the U.S. is: B) The International Accounting Standards Board issues accounting standards that must be followed by all companies that engage in international business. This statement is incorrect because while the International Accounting Standards Board (IASB) does issue the International Financial Reporting Standards (IFRS), not all companies are required to follow them; the adoption of IFRS is subject to the regulatory decisions of individual countries. In the U.S., the primary accounting standard-setting body is the Financial Accounting Standards Board (FASB), which issues the Generally Accepted Accounting Principles (GAAP) that companies must follow.
In terms of regulatory oversight, it is true that the Securities and Exchange Commission (SEC) oversees U.S. financial markets and accounting standard-setting bodies. The SEC is crucial in setting the legal standards for disclosure of information regarding publicly traded securities. Additionally, the Public Company Accounting Oversight Board (PCAOB) is responsible for establishing auditing standards, and not the accounting standards themselves.
It is important to note that corporate governance and the role of auditing firms played a significant part in previous accounting scandals, leading to the creation of legislation such as the Sarbanes-Oxley Act to protect investors from accounting fraud and increase confidence in financial reporting by public corporations.