Acc 491 Wk 2

1-23 (Organizations associated with the public accounting profession) Several private and
public sector organizations are associated with the profession. Listed below are activities
pertaining to these organizations.
1. License individuals to practice as CPAs.
State boards of accountancy issue licenses to practice as a CPA.
2. Promulgate GAAP.
The Financial Accounting Standard Board (FASB) promulgates GAAP.
3. Issue Statements on Auditing Standards.
The Auditing Standards Board (the senior technical body of the American Institute of Certified Public Accountants [AICPA]) issues Statements on Auditing Standards (SAS).
4. Regulate the distribution and trading of securities offered for public sale.
The Securities and Exchange Commission (SEC) regulates the distribution and trading of securities offered for public sale.
5. Establish its own code of professional ethics.
The AICPA Professional Ethics Division is responsible for establishing the AICPA Code of Professional Conduct.
6. Issue Statements of Financial Accounting Standards.
The FASB issues Statements of Financial Accounting Standards.
7. Impose mandatory continuing education as a requirement for renewal of license to
practice as a CPA.
State boards of accountancy impose mandatory continuing education for license renewal.
8. Issue disclosure requirements for companies under its jurisdiction that may exceed
GAAP.
The Securities and Exchange Commission issues disclosure requirements for companies under its jurisdiction.
9. Issue auditing interpretations.
The Auditing Standards Board (a division of AICPA) issues auditing interpretations.
10. Cooperate with the AICPA in areas of mutual interest such as continuing professional
education and ethics enforcement.
State societies of CPAs cooperate with the AICPA in areas such as continuing education.
11. Take punitive action against an independent auditor.
State and Federal courts and the SEC can take punitive action against independent...