Which entity has legislative authority to set accounting reporting rules for publicly held corporations?

The Securities and Exchange Commission (SEC) is the entity with the legislative authority to set accounting reporting rules for publicly held corporations. The SEC was established to protect investors and maintain fair, orderly, and efficient markets. One of its key responsibilities is overseeing the financial reporting of publicly traded companies to ensure they provide accurate and transparent information to investors.

While the Financial Accounting Standards Board (FASB) develops the Generally Accepted Accounting Principles (GAAP) in the United States and has significant influence over how financial statements are prepared, it does not have the legislative power to enforce these rules. Instead, the SEC has the authority to adopt FASB's standards as official guidelines for publicly held corporations.

The Public Company Accounting Oversight Board (PCAOB) oversees the audits of public companies, establishing auditing standards, but again, it does not have legislative authority over accounting reporting rules. Similarly, the American Institute of Certified Public Accountants (AICPA) provides resources and guidance for accounting professionals but lacks the regulatory power to set rules for publicly held entities. Therefore, the SEC plays a crucial role in ensuring compliance with financial reporting standards for publicly traded companies.