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FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

Problem 1Q

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Question

Please answer the following question and read the discussion question rubric: What is the primary objective of financial accounting, and explain the role of the SEC and FASB?

Expert Solution

Step 1

The primary objective of financial accounting:

Financial accounting's primary goal is to accurately prepare an organization's financial accounts for a certain period, often known as financial statements. The income statement, balance sheet, and statement of cash flows are the three basic financial statements.

Role of SEC:

The Securities and Exchange Commission (SEC) is a federal body that was established by Congress in 1934 to regulate commerce and stock markets in the United States. The SEC's primary goal is to protect investors from deceptive tactics in the financial markets. It also supervises securities market functions and supports capital generation.