Mat companies with more than 10 million in assets and

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mat companies with more than $10 million in assets and whose securities are held by more than 500 owners must file annual and other periodic reports, including financial statements that are available for download from e SEC's database ( ). The SEC has ultimate authority over U.S. financial reporting, including setting accounting standards for pre- ?afing financial statements. Since 1939, however, the SEC has looked primarily to the private sector to set ac- counting standards. One such private sector organization is the American Institute of Certified Public Accountants AICPA), whose two committees, the Committee on Accounting Procedure (1939-59) and the Accounting Prin- ziples Board (1959-73), authored the initial body of accounting standards. Currently, the Financial Accounting Standards Board (FASB) sets U.S. financial accounting standards. The E\SB is an independent body overseen by a foundation, whose members include public accounting firms, investment managers, academics, and corporate managers. The FASB has published over 150 accounting standards governing :he"preparation of financial reports. This is in addition to over 40 standards that were written by predecessor organiza- aons to the FASB, numerous bulletins and interpretations, Emerging Issues Task Force (EITF) statements, AICPA szarementsof position (SOP), and direct SEC guidance, along with speeches made by high-ranking SEC personnel, all . which form the body of accounting standards governing financial statements. Collectively, these pronouncements, rules and guidance create what is called Generally Accepted Accounting Principles (GAAP). The standard-setting process is arduous, often lasting up to a decade and involving extensive comment by the ::uhlic, public officials, accountants, academics, investors, analysts, and corporate preparers of financial reports. The reason for this involved process is that amendments to existing standards or the creation of new standards af- - t the reported financial performance and condition of companies. Consequently, given the widespread impact of ~cial accounting, there are considerable economic consequences as aresult of accounting changes. To influence standard-setting process, special interest groups often lobby members of Congress to pressure the SEC and, ::himately, the FASB, on issues about which constituents feel strongly. uditsand Corporate Governance ~ "enthough key executives must personally attest to the completeness and accuracy of company financial state- - nts, markets demand further assurances from outside parties to achieve the level of confidence necessary to war- t investment, credit, and other business decisions. To that end, companies engage external auditors to provide opinion about financial statements. Further, companies implement a system of checks and balances that monitor ;;J3Jlagers'actions, which is called corporate governance.
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