Regulatory Bodies: American Institute of CPAs (AICPA)

Accounting Regulatory Bodies
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Accounting regulatory bodies
The United States has a system of private and government entities tasked to ensure effective, correct and accepted professional practice in the US-certified public accountants. These bodies include; the American Institute of CPAs (AICPA), the financial accounting standards board (FASB), and the public company accounting oversight board (PCAOB) (Chen, Ding & Xu, 2014). We also have other bodies like US Securities and Exchange Commission (SEC) and an international body: the International Accounting Standards Board (IASB. Each of these bodies is involved in various issues in the accounting world, for instance standardization. This paper reviews some of private and governmental accounting, regulatory bodies and their relationships to each other.
American Institute of CPAs (AICPA)
The American Institute of CPAs is the world’s biggest association representing the accounting profession. It has more than 400, 000 members in over 140 countries across the world (Camfferman & Zeff, 2015). It has served since 1887. AICPA has members who represent different sectors of the economy like business and industry, government, education, consultancy and public practice. The body is responsible for setting up ethical standards for the profession and U.S auditing standards for nonprofit organizations, private companies, federal, state, and local governments. It sets and grades the common CPA examination. In partnership with Chartered Institute of Management Accountants, AICPA has established Chartered Global Management Accountant designation which sets out the standards that are globally recognized in accounting (Camfferman & Zeff, 2015).
Public Company Accounting Oversight Board (PCAOB)
The Public Company Accounting Oversight Board (PCAOB) was established in 2002 as part of the Sarbanes-Oxley Act of 2002 (SEC, 2013). Some of its roles include inspections process, the registration process, investor protection and standard setting. On its creation PCAOB was meant to be a private entity, but it has always been subject to control by Securities and Exchange Commission (SEC) (PCAOB, 2017). It is the SEC that is responsible for naming PCAOB’S board members, approving its rules, bylaws, ethics code and auditing standards. Furthermore, SEC approves PCAOB’S budget (Camfferman & Zeff, 2015). SEC treats PCAOB as an agency, despite the clear statutory characterization as an independent private entity.
Securities and Exchange Commission (SEC)
This is the body that regulates capital markets in the United States. It stands for U.S. Securities and Exchange Commission. It is a government agency. The law has given SEC the mandate to specify the manner and content of financial statements filed with the commission. SEC oversees more than 30, 000 registrants who include 12000 public companies, 4600 mutual funds, 11 300 investment advisers, 600 transfer agencies and more than 5000 broker dealers (SEC, 2014). There are more than a thousand companies which are not U...