The FASB, the SEC and the PCAOBE Ethical financial reporting is essential to ensuring consumer trust within an economy. Accounting records record cash transactions in the form of financial reports. Financial information is used to interpret and analyze business activities for investment and effective management purposes. Misrepresentations, whether intentional or accidental, can send the wrong signal to interested parties, leading to poor decisions being made. Companies have an ethical and legal obligation to provide financial information. To ensure proper reporting, several agencies are employed to regulate businesses. The Financial Accounting Standards Board, the FASB, the Securities and Exchange Commission, the SEC, and the Public Company Accounting Oversight Board, PCAOB, are all organizations involved in promoting fair accounting principles for American businesses. The most well-known regulatory agency is the SEC. This is the government agency that oversees the accounting of publicly traded companies in the United States. This agency was created in 1934 in response to the events that led to the Great Depression. The mission of the SEC is “to protect investors, maintain fair, orderly, and efficient markets, and facilitate capital formation” (US Securities and Exchange Commission, 2006). Instead of implementing its own rules, the SEC chose the FASB to establish high-quality accounting standards to protect the public interest (Wikipedia, 2006a). In response, the FASB developed Generally Accepted Accounting Principles, or GAAP, to regulate U.S. companies. As a private, nonprofit organization, the FASB has no influence from government agencies or other groups. As business evolves, the FASB updates GAAP to remain applicable to...... middle of paper ......York: McGraw-Hill.Marshall, D., McManus, W and Viele, D. (2004b). Financial statements and accounting concepts/principles. In M. Marcus (Ed.) Accounting: What the numbers mean (pp. 29-50). New York: McGraw-Hill. U.S. Securities and Exchange Commission. (2006). The Investor's Advocate: How the SEC protects investors, maintains market integrity, and facilitates capital formation. Retrieved May 7, 2006, from http://www.sec.gov/about/whatwedo.shtmlWikipedia Contributors. (2006a). Accounting Oversight Council for Public Companies. Wikipedia, the free encyclopedia. Retrieved May 5, 2006, from http://en.wikipedia.org/wiki/PCAOBWikipedia Contributors. (2006b). Financial Accounting Standards Board. Wikipedia, the free encyclopedia. Retrieved May 5, 2006 from http://en.wikipedia.org/wiki/FASB