Governing Bodies for the Accounting Profession


To begin with, there is a strong necessity to emphasize that the governing bodies for the accounting professions are numerous and act on the basis of regulating the rules and principles of the standards of accounting worldwide. Originally, the accounting principles in particular, and the accounting professions in general have deep roots prior to the matters of independence of the economic systems of the organizations by the means of adopting the Income Tax Acts, Companies Act, and Sales Tax Acts. The fact is that almost all the accounting legislations entail the principles, which are set up by the international accounting bodies, such as ICAEW, ACCA, etc

Organizations and Standards

Arguing on the matters of the accounting standards, and the bodies, which regulate the accounting professions, there is a strong necessity to mention the existence of GAAP – the Generally Accepted Accounting Principles. Edmonds (2004) emphasizes the following fact: “Most generally accepted accounting principles are represented by pronouncements issued by various accounting authoritative bodies. There is a four-level GAAP hierarchy, the levels of which represent the relative priority of the various sources of GAAP, which is utilized by auditors to determine the fairness of the presentation of financial statements. The GAAP hierarchy applies to both for-profit and not-for-profit entities.” In the light of these facts, it should be stated that the GAAP is the universal set of rules and accounting regulation principles.

Another body is the FASB (Financial Accounting Standards Board). It is often regarded as an authoritative body of the accounting profession. The main aim of this organization is to establish and publish the standards rules and principles of accounting, which constantly appear in the changing economic surroundings, for guiding and simplifying the accounting activities. The fact is that numerous types of announcements are originated by the FASB. FAS (Statements of Financial Accounting) SFAC (Statements of Financial Accounting Concepts), various technical bulletins, stipulating the financial circumstances and accounting rules are among the acts, published by FASB. The fact is that various types of accounting pronouncements have been published by FASB for all the central and the most important accounting procedures. Moore (2006) in his research emphasizes the fact that the offered legislation is aimed to clarify the authorities of the other accounting bodies, such as the Chartered Accountants, the Certified General Accountants and the Society of Management Accountants for governing and regulating the activities by the members and for the increasing of accountability for the public communication of these associations.

It should be stated that the origin of the decisions, which are generally taken under the Accounting Professions Act corresponds with the general principles of professional accounting activity, nevertheless, there are some decisions, which are above the general accounting activity. Thus, some of the offered measures are the following:

  • Publishing of the statutes and public acts of the present Certified General Accountants (CGAs) and Certified Management Accountants (CMAs), which often introduce their private acts;
  • Publish, interpret and clarify the powers and authorities of the accounting bodies in the issues of governing their members, taking into consideration the power to admit members, ensure their competence through entry standards, inspect or investigate member practices, and discipline members who break the rules;

Confirming that the information, which is generally received by the regulatory bodies for carrying out their duties is kept confidential (Leuz, Pfaff, 2004)

The technical accounting standards, which are defined by the mentioned organizations, clarify the accounting rules for any financial activity and any circumstances. In order the principles were agreed, and did not contradict in a different part of the world International Accounting Standards Body (IASB) is focused on the development of universal accounting standards all over the world. Originally, this procedure is extremely important in the circumstances of the increasingly globalizing world, business and financial activity. Still, the standards may become effective only when the countries adopt them.

Another organization, which plays an important role in governing the accounting activity is the Accounting Principles Board. In spite of the fact the majority of the rules and principles of this body is taken from the GAAP rules, the pronouncements, which are issued by APB are vital for the procedures of improving the vital spheres of accounting theory and practice, while GAAP rules are not intended for providing any changes to the rules of accounting. Moreover, APB regulates the related to the accounting sphere – the sphere of investment crediting. Accounting standards for investment credits also require thorough and accurate regulation for avoiding misconceptions in financial relations.

Ethical Issues

Taking into consideration that accounting is mostly a technical issue, ethical issues are rarely considered and regulated. Still, it should be stated that these matters are not less important than the regulating principles and procedures. Some Accounting bodies are rather quick and proactive if ethical matters are touched. FASB, for instance, aims to ensure that the public confidence within the issues of fair accounting and the profession, in general, stays high. Heely and Nersesian (2003) state the following fact in their research: “They were concerned not only to ensure that members adhered to the rules, standards and the general legal procedures but also to see that accountants carry out their duties diligently, truthfully, fairly and in the best possible manner so that the interests of their clients are protected and safeguarded.” From this point of view, there is a strong necessity to mention that the issues and codes of ethics are often used for the process of referring to the standards of ethical conduct in general, and those, which are used by accounting bodies in particular. According to Comiskey (2004): “These comprise of expected behaviors and actions demanded from accountants by the profession. As such, the codes are documents that provide a mechanism and guidance for self-governance within the profession. It is not a rule of law. Originally, it is a set of moral constructs that the profession require its members to adhere to. Violation of the codes will lead to the violator being reported for disciplinary action to be taken by the governing body


Finally, there is a strong necessity to emphasize that the bodies for regulating the accounting relations, rules and standards are numerous. The fact is that such amount of bodies may seem ineffective, nevertheless, each is engaged in its own sphere of accounting, and the processes of fitting the rules and principles for the current economic situation and financial circumstances all over the world.


Comiskey, E. E., & Mulford, C. W. (2004). Guide to Financial Reporting and Analysis. New York: John Wiley & Sons.

Edmonds, T. (2004) “Fundamental Financial Accounting Concepts” McGraw-Hill/Irwin; 6 edition.

Heely, J. A., & Nersesian, R. L. (2003). Global Management Accounting: A Guide for Executives of International Corporations. Westport, CT: Quorum Books.

Leuz, C., Pfaff, D., & Hopwood, A. (Eds.). (2004). The Economics and Politics of Accounting: International Perspectives on Research Trends, Policy, and Practice. Oxford: Oxford University Press.

Moore, L. (2006). Governmental Accounting Made Easy. Issues in Accounting Education, 21(1), 70.

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