- CFA Exams
- CFA Level I Exam
- Topic 3. Financial Statement Analysis
- Learning Module 17. Financial Reporting Standards
- Subject 2. Financial Reporting Standard-Setting Bodies and Regulatory Authorities
CFA Practice Question
Which two authorities are primarily responsible for establishing generally accepted accounting principles in the United States?
B. The Financial Accounting Standards Board and the Securities and Exchange Commission
C. The Financial Accounting Standards Board and the American Institute of Certified Public Accountants
A. The Financial Accounting Standards Board and the Internal Revenue Service
B. The Financial Accounting Standards Board and the Securities and Exchange Commission
C. The Financial Accounting Standards Board and the American Institute of Certified Public Accountants
Correct Answer: B
The Financial Accounting Standards Board is a private sector board that consists of seven members. The Securities and Exchange Commission is a government agency. Both groups have primary responsibility for establishing generally accepted accounting principles. However, the Securities and Exchange Commission delegates much of its authority for establishing generally accepted accounting principles to the Financial Accounting Standards Board.
User Contributed Comments 4
| User | Comment |
|---|---|
| danlan | Good to know both FASB and SEC's responsibility and their relationship |
| armanaziz | What's the role of AICPA? |
| achu | Note, it's FASB and SEC, NOT AICPA. I believe aicpa members probably overlap with FASB in many cases. |
| johntan1979 | Nothing much... provide the credentials, sets generally accepted professional and technical standards for CPAs |