Ethical financial reporting by the FASB, SEC, and PCAOBE is critical to ensuring consumer trust within an economy. Accounting records record cash transactions in the form of financial reports. Financial reporting is used to interpret and analyze business activities for the purpose of investing and managing efficiently. Misrepresentations, whether intentional or accidental, can send the wrong signal to stakeholders, resulting in poor decisions being made. Companies have an ethical and legal obligation to financial reporting. To ensure that proper reporting is followed, several agencies are employed to regulate the activities. The Financial Accounting Standards Board, FASB, the Securities and Exchange Commission, the SEC, and the Public Company Accounting Oversight Board, PCAOB, are all agencies involved in promoting fair accounting standards for U.S. businesses. The most commonly known regulatory agency is the SEC. It is the government agency that oversees the accounting of publicly traded companies in the United States. This agency was created in 1934 in response to the events leading up to the Great Depression. The mission of the SEC is to “protect investors, maintain fair, orderly, and efficient markets, and facilitate capital formation” (U.S. Securities and Exchange Commission, 2006). Instead of implementing its own rules, the SEC chose the FASB to establish high-quality accounting standards to protect public interests (Wikipedia, 2006a). In response, the FASB developed Generally Accepted Accounting Principles, GAAP, to regulate U.S. companies. As a private, non-profit organization, the FASB has no influence from government agencies or other groups. As the business changes, the FASB updates GAAP to remain applicable to... middle of document... York: McGraw-Hill.Marshall, D., McManus, W., & Viele, D. (2004b) . Accounting concepts/principles and financial statements. In M. Marcus (Ed.) Accounting: What the Numbers Mean (pp. 29-50). New York: McGraw-Hill. US Securities and Exchange Commission. (2006). The Investor Defender: How the SEC Protects Investors, Maintains Market Integrity, and Facilitates Capital Formation. Retrieved May 7, 2006, from http://www.sec.gov/about/whatwedo.shtmlWikipedia Contributors. (2006a). Supervisory Body for the Accounting of Public Companies. Wikipedia, the free encyclopedia. Retrieved May 5, 2006, from http://en.wikipedia.org/wiki/PCAOBWikipedia Contributors. (2006b). Financial Accounting Standards Committee. Wikipedia, The Free Encyclopedia. Retrieved May 5, 2006, from http://en.wikipedia.org/wiki/FASB