Which entities enforce financial reporting standards in the United States?

• A. GAAP and SEC, with oversight by FASB and PCAOB
• B. IFRS and IMF
• C. FDIC and OCC
• D. IRS and CBO

Answer: (A)

In the United States, financial reporting standards are set by GAAP, developed by the Financial Accounting Standards Board, and are enforced for publicly traded companies by the Securities and Exchange Commission. Audits of these financial statements are overseen by the Public Company Accounting Oversight Board to ensure accuracy and independence. The other organizations listed don’t govern US financial reporting: IFRS is international standards, IMF is an international organization, FDIC and OCC regulate banks, and IRS and CBO handle taxes and budgeting. So, GAAP together with the SEC, under the oversight of FASB and PCAOB, establishes and enforces financial reporting.