|One entity that looks over accounting firms is the Public Company Accounting Oversight Board (PCAOB). They are a corporation that was started by Congress to audit accounting firms and to also protect the interest of investors. In July 30, 2002 PCAOB was established to be able to audit and fine firms. They also oversee firms to prevent fraud and to make sure that firms are up to date and are practicing good services. (Auditing, 2003-2011)
Some of the powers that PCAOB has are allocate, assess, and collect accounting support fees that fund the board; conduct investigations and disciplinary proceedings concerning, and impose appropriate sanctions were justified upon, registered public accounting firms and associated persons of such firms (including fines of up to $100,000 against individual auditors, and $2 million against audit firms; sue and be sued, complain and defend, in its corporate name and through its own ...view middle of the document...
They provided a safer and reassuring way to handle business by regulating the firms with auditing. (What we do, 2011)
The laws that control the organization are Securities Act of 1933, Securities Exchange Act of 1934, Trust Indenture Act of 1939, Investment Company Act of 1940, Investment Advisers Act of 1940, Sarbanes-Oxley Act of 2002. These laws are what set the standards for the accounting firms and also the rules they are obligated to follow. They are what give the power to the SEC to fine or shut down a firm. (The Laws That Govern the Securities Industry, 2010)
With these two Federal organizations regulating the services of accounting firms, it provides safety of how investors, brokers, and firms handle currency. With these organizations and the regulations they have enforced to firms they have also increased firms performance and also has brought new standards to companies. With firms having these accounting standards and also regulations it has helped businesses increase profit and efficiency which they have high value for.
The relationship with essential accounting principles and business performance is the large increase with morale and also being able to maximize profits with higher principles. If the standards that the firm has with accounting it will contribute with the business performance understand where the changes they need to make and also where they cut costs within their business. The efficiency caused by solid accounting principles creates a huge impact on a business. The high value accounting principles brings to a business is greatly admired by the clients and investors to help make the decisions and outcomes that is needed within the company.
Auditing. (2003-2011). Retrieved July 7-21-2011, 2011, from PCAOB: http://pcaobus.org/Standards/Auditing/Pages/default.aspx
The Laws That Govern the Securities Industry. (2010, January 29). Retrieved July 21, 2011, from U.S. Securities and Exchange Commission: http://www.sec.gov/about/laws.shtml
What we do. (2011, July 19). Retrieved July 21, 2011, from U.S. Securities and Exchange Commission: http://www.sec.gov/about/whatwedo.shtml