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Explain the relationship of the SEC and the Financial Accounting Standards Board (FASB).

Explain the relationship of the SEC and the Financial Accounting Standards Board (FASB).

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Answer #1

Relatioship of the SEC & FASB is stated below pointwise:

1. Whenever someone invest in stocks, bonds, mutual funds or any other publicly traded security, he/she take-on risk.

2. The value of these assets is dependent upon the financial health of the issuing companies and their ongoing growth.

3. The U.S. Securities and Exchange Commission [SEC] regulates the financial disclosures and trading operations of public companies, while the Financial Accounting Standards Board [FASB] determines exactly how those finances should be reported.

4. The SEC's role is to protect investors, to maintain orderly and efficient markets and to assets companies in raising capital, whereas FASB role is to ensure that companies report financial information in a clear and ethical way, and that accounting practices are consistent.

5. Collectively both, the SEC and FASB want to make sure that people have as much information as is possible about the companies they invest in, and that this information is delivered in a clear and consistent manner.

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