Question

The SEC exerts a continuing influence on the establishment of accounting standards. It does so primarily by: Multiple Choice

1. Monitoring the development of GAAP within the accounting profession and using its stature to influence that development.
2. Exercising its statutory authority to prescribe external financial reporting requirements.
3. Allying with the AICPA to lobby the efforts of the FASB.
4. Providing auxiliary funding to the FASB.

Answer 1

1) Monitoring the development of GAAP within the accounting profession and using its stature to influence that development

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Step-by-step explanation:

If we really dig into what the law says regarding the SEC and accounting standards, we would find that the SEC has the final authority on approving or modifying accounting standards for corporations. But it really hasn't done its job and it has basically delegated the task of setting accounting standards to the Financial Accounting Standards Board (FASB) which elaborates GAAP standards.