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ABS Accounting

Organizations and Rules that Govern Accounting

Here is a listing of the organizations that rule and govern accounting. As a business owner or accounting student, you will want to familiarize yourself with these organizations and the roles they play in accounting.

Governing Organizations

  • (FASB) Financial Accounting Standards Board-oversees the creation and governance of accounting standards
  • (SEC) Security Exchange Commission – oversees. U. S. financial markets and sets standards
  • (GAAP) Generally Accepted Accounting Principles – main U.S. accounting rule book

Business Organizations

  • Sole Proprietorship – Single Business owner
  • Partnership – business with two or more owners
  • Corporation – business organized under state law as a separate entity
  • Limited-Liability Company (LLC) – company which each member is only liable for his or her own actions

Rules

  • Cost Principle-acquired asses and services should be recorded at their actual cost
  • Going Concern Assumption-assumes that the entity will remain in operation for the foreseeable future
  • Monetary Unit Assumption-In the United States recorded transactions are in dollars
  • (IFRS) International Financial Reporting Standards -A set of global accounting standards that are used by more that 120 nations
  • Ethics in Accounting and Business
    • Audits – an examination of a company’s financial statements and records
    • Sarbanes-Oxley Act (SOX) – intended to prevent or curb fraud