Final answer:
Publicly traded companies in the United States must follow Generally Accepted Accounting Principles (GAAP), which are enforced by the Securities and Exchange Commission (SEC). International Financial Reporting Standards (IFRS) are not required in the U.S., and the Sarbanes-Oxley Act (SOX) relates to financial practice rather than being an accounting principle.
Step-by-step explanation:
All publicly traded companies must adhere to Generally Accepted Accounting Principles (GAAP). These are a set of accounting standards that are used in the United States to ensure consistency in financial reporting. The Securities and Exchange Commission (SEC), which is the federal agency responsible for enforcing federal securities laws and regulating the securities industry, mandates that publicly traded companies follow GAAP. While the International Financial Reporting Standards (IFRS) are used by many other countries, the SEC has not adopted these for domestic use. The Sarbanes-Oxley Act (SOX), passed in 2002, is a federal law that affects the financial practice and corporate governance of publicly traded companies and stipulates how they must be audited but isn't an accounting principle itself.