Is the promulgation of financial accounting standards a political$$ process? Explain.

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Part $1$

A$.$

$$Yes$,$ the promulgation of financial accounting standards is a political process. The standard setting process is impacted by several lobbying groups. The SEC can exert pressure on the FASB to issue accounting standards and veto the standards promulgated by the FASB. Many other$$ groups, such as auditing$$ firms, the corporate$$ sector, and investors can influence the FASB by written comments and participation in public hearings regarding a proposed financial reporting standard.

B$.$

$$No$,$ the promulgation of financial accounting standards is not a political process. The standard setting process is protected under U$.$S$.$ law from the impact of several lobbying$$ groups, including the$$ SEC, FASB, auditing$$ firms, the corporate sector and investors.

C$.$

$$No$,$ the promulgation of financial accounting standards is not a political process. The standard setting process is impacted only by$$ managers, accountants and auditors through written comments and participation in closed meetings regarding a proposed financial reporting standard.

D$.$

$$Yes$,$ the promulgation of financial accounting standards is a political process. The standard setting process is impacted by several lobbying groups. The FASB can exert pressure on the SEC to issue accounting standards and veto the standards promulgated by the SEC. Many other$$ groups, such as auditing$$ firms, the corporate$$ sector, and investors can influence the SEC by written comments and participation in public hearings regarding a proposed financial reporting standard.