The role of the Securities and Exchange Commission in the formulation of accounting principles can be best described as

Question

Quizplus · Accepted Answer

The Securities and Exchange Commission (SEC) has influence over the development of accounting principles, and can be both primary and secondary depending on the specific issue. While the SEC does not create accounting standards itself, it has the power to approve or reject the standards that are developed by other entities, such as the Financial Accounting Standards Board (FASB). However, the SEC can also take the lead in developing new accounting standards, particularly in areas that are of significant public interest or concern. Therefore, the role of the SEC in the formulation of accounting principles is not consistently primary or secondary, but rather varies depending on the specific circumstances.

The Role of the Securities and Exchange Commission in the Formulation