United States of America

The statutory framework for corporate financial reporting and auditing in the United States is established through federal securities legislation, most notably the Securities Exchange Act of 1934 and the Sarbanes-Oxley Act of 2002, together with standards issued by recognized private-sector standard-setting bodies under regulatory oversight.

For nongovernmental entities, financial reporting standards are developed by the Financial Accounting Standards Board (FASB) through the Accounting Standards Codification, which constitutes U.S. Generally Accepted Accounting Principles (U.S. GAAP). The Securities and Exchange Commission (SEC) retains statutory authority over financial reporting requirements for issuers under the federal securities laws and continues to recognize FASB standards as authoritative for domestic public companies. Foreign private issuers are permitted by the SEC to use IFRS Accounting Standards as issued by the International Accounting Standards Board without reconciliation to U.S. GAAP.

Only public business entities are generally subject to mandatory statutory financial reporting requirements under federal securities laws. Other entities, including private companies, commonly prepare financial statements in accordance with U.S. GAAP pursuant to contractual, financing, lending, or investor requirements. FASB also addresses the reporting needs of private entities through its Private Company Council.

The auditing framework is bifurcated according to the type of entity being audited. Audits of issuers, broker-dealers, and other entities within the SEC regulatory perimeter are governed by standards issued by the Public Company Accounting Oversight Board (PCAOB), subject to SEC approval and oversight. Under the Sarbanes-Oxley Act, audit firms performing such engagements must be registered with the PCAOB and are subject to its inspection, investigation, and disciplinary regime.

For nonissuers and other nonpublic entities, auditing standards are established by the Auditing Standards Board (ASB) of the American Institute of Certified Public Accountants. These standards form the U.S. Generally Accepted Auditing Standards applicable to private-sector audits outside the PCAOB framework.

The banking sector is additionally subject to prudential regulatory reporting requirements overseen by the Board of Governors of the Federal Reserve System, the Federal Deposit Insurance Corporation, and the Office of the Comptroller of the Currency. While these reporting frameworks are generally based on U.S. GAAP, sector-specific regulatory adjustments may apply.

Public sector financial reporting is governed separately. At the federal level, standards are issued by the Federal Accounting Standards Advisory Board, while state and local governments apply standards issued by the Governmental Accounting Standards Board.

The regulation of the accountancy profession in the United States is primarily carried out at the jurisdiction level by the state boards of accountancy (SBOAs), which operate across the 55 U.S. licensing jurisdictions and coordinate through the National Association of State Boards of Accountancy (NASBA). The SBOAs are responsible for the licensure and regulation of Certified Public Accountants (CPAs), including establishing initial professional development and continuing professional development requirements, setting ethical requirements, overseeing investigative and disciplinary processes, and regulating firm registration and practice rights within their respective jurisdictions.

The Public Company Accounting Oversight Board (PCAOB) provides independent oversight of registered public accounting firms that audit issuers and Securities and Exchange Commission-registered brokers and dealers. Established under the Sarbanes-Oxley Act of 2002, the PCAOB is responsible for registering firms within its remit; establishing or adopting auditing, attestation, quality control, ethics, and independence standards; conducting inspections; and investigating and disciplining registered firms and associated persons. Firms performing such engagements must be registered with the PCAOB and comply with its rules and standards.

The Securities and Exchange Commission (SEC) retains oversight authority under the federal securities laws and recognizes the Financial Accounting Standards Board (FASB) as the designated accounting standard-setter for purposes of the federal securities laws. In addition, accountants who appear or practice before the SEC may be subject to disciplinary action under the Commission’s Rules of Practice.

The American Institute of Certified Public Accountants (AICPA) is a voluntary professional accountancy organization for CPAs. For its members, the AICPA establishes ethical and continuing professional development requirements, develops resources related to the Code of Professional Conduct, and operates the peer review program for firms performing nonissuer engagements in jurisdictions where peer review is required. The AICPA also develops the Uniform CPA Examination, which is used by the SBOAs as part of the licensure process.

The Institute of Management Accountants (IMA) is a voluntary professional body representing management accounting professionals. It administers the Certified Management Accountant (CMA) designation and establishes ethical and continuing professional education requirements for its members and certification holders. The IMA also maintains disciplinary procedures for ethical breaches through its ethics compliance framework.

The Public Company Accounting Oversight Board (PCAOB) is the independent audit oversight authority in the United States for audits of issuers and Securities and Exchange Commission-registered brokers and dealers. Established under the Sarbanes-Oxley Act of 2002, the PCAOB is a private-sector, nonprofit corporation operating under the oversight of the Securities and Exchange Commission (SEC). Its mandate is to protect investors and further the public interest in the preparation of informative, accurate, and independent audit reports.

The PCAOB’s core responsibilities include the registration of public accounting firms within its remit, periodic inspections of registered firms, the establishment of auditing, quality control, ethics, and independence standards, and the investigation and discipline of registered firms and associated persons for violations of applicable laws, rules, and professional standards. Registered firms that audit more than 100 issuers are subject to annual inspections, while other firms are generally inspected at least once every three years.

The SEC exercises statutory oversight over the PCAOB, including approval of its standards, rules, budget, and Board appointments, as well as review of disciplinary and inspection-related matters where applicable.

The PCAOB is a member of the International Forum of Independent Audit Regulators (IFIAR) and actively participates in its working groups and international inspection coordination initiatives.

For audits outside the PCAOB’s jurisdiction, including nonissuer and private-sector audits, oversight is supported through the peer review framework operated by the American Institute of Certified Public Accountants (AICPA) in coordination with the state boards of accountancy, as further described in the Regulation of the Profession section.

The American Institute of Certified Public Accountants (AICPA)

The American Institute of Certified Public Accountants (AICPA) is a voluntary professional accountancy organization representing Certified Public Accountants (CPAs) in the United States and internationally. Established in 1887, the AICPA supports the profession through standard-setting activities for nonissuer audits via its Auditing Standards Board (ASB), the establishment of ethical and continuing professional development requirements for its members, and the development and administration of the Uniform CPA Examination in coordination with the National Association of State Boards of Accountancy (NASBA). The AICPA also operates the peer review program for firms performing nonissuer engagements in jurisdictions where such reviews are required and maintains investigative and disciplinary mechanisms for its members.

In 2017, the AICPA and the Chartered Institute of Management Accountants (CIMA) combined their operational activities through the Association of International Certified Professional Accountants while retaining their respective membership bodies. Through this structure, qualified members may hold the Chartered Global Management Accountant (CGMA) designation. The Association serves as the global platform for professional development, advocacy, research, and support for both public and management accounting professionals.

The Institute of Management Accountants (IMA)

The Institute of Management Accountants (IMA) is a voluntary professional body focused on management accounting and financial management professionals. Established in 1919, the IMA administers the Certified Management Accountant (CMA) designation and establishes ethical, initial professional development, and continuing professional development requirements for certification holders and members. The IMA also maintains disciplinary and ethics compliance procedures and provides extensive technical resources, continuing education, and thought leadership for the profession.

Quality assurance arrangements in the United States operate through a split framework. For audits within the remit of the Public Company Accounting Oversight Board (PCAOB), the Sarbanes-Oxley Act of 2002 establishes a mandatory inspection system for registered firms auditing issuers and Securities and Exchange Commission-registered brokers and dealers. In general, firms auditing more than 100 issuers are inspected annually, while firms auditing 100 or fewer issuers are inspected at least once every three years.

At the standard-setting level, the PCAOB adopted QC 1000, A Firm’s System of Quality Control in 2024, and the Securities and Exchange Commission approved it in September 2024. However, the PCAOB now indicates that QC 1000 and related amendments will become effective on December 15, 2026. Accordingly, the PCAOB inspection and quality control framework is operational, but the jurisdiction has not adopted the International Standard on Quality Management (ISQM) 1 and ISQM 2 for this segment of the market.

For nonissuer audits, quality assurance is supported through the peer review system operated by the American Institute of Certified Public Accountants (AICPA) and accepted by state boards of accountancy that require peer review. The Auditing Standards Board issued new quality management standards in 2022, including Statement on Quality Management Standards No. 1 and Statement on Quality Management Standards No. 2, which are adapted from the IAASB quality management standards and are effective on December 15, 2025.

Overall, the jurisdiction maintains an operational quality assurance system for the relevant audit segments, but the framework is not yet fully aligned with SMO 1 because the PCAOB segment does not apply ISQM-based requirements and QC 1000 is not yet effective. Adoption assessment: Partially Adopted. ISQM 1 and ISQM 2 are adopted for AICPA-governed nonissuer engagements through SQMS No. 1 and SQMS No. 2, but they are not adopted by the PCAOB for issuer and broker-dealer audits.

Current Status: Partially Adopted

Initial professional development and continuing professional development requirements in the United States are established primarily by the state boards of accountancy, with coordination support from the National Association of State Boards of Accountancy (NASBA) and the American Institute of Certified Public Accountants (AICPA) through the Uniform Accountancy Act (UAA) model and the Uniform CPA Examination. The licensure framework generally requires higher education, successful completion of the Uniform CPA Examination, relevant practical experience, and continuing professional development, but these requirements are set and enforced at the state level rather than through a single national adoption instrument.

For AICPA members, continuing professional development requirements remain set at 120 hours over a three-year period, and the AICPA indicates that its member requirements are aligned with the 2019 International Education Standards (IES). The Institute of Management Accountants (IMA) likewise maintains an education, examination, practical experience, and continuing education framework for the Certified Management Accountant (CMA) designation, including 30 hours of annual continuing professional education, of which 2 hours must be in ethics.

Overall, the U.S. framework reflects many core elements of the 2019 IES, but the jurisdiction has not adopted the IES in their entirety for all aspiring professional accountants and professional accountants, because requirements continue to vary by state jurisdiction and there is no single national mandate confirming full incorporation of all currently effective IES requirements across the profession.

Current Status: Partially Adopted

Auditing standards in the United States are established through a dual legal and regulatory framework.

For audits of issuers and Securities and Exchange Commission-registered brokers and dealers, the legal basis is the Sarbanes-Oxley Act of 2002, under which the Public Company Accounting Oversight Board (PCAOB) establishes national auditing standards for registered firms. These standards are the PCAOB Auditing Standards and do not constitute adoption of the International Standards on Auditing (ISA) Handbook.

For nonissuer audits, the applicable framework is U.S. Generally Accepted Auditing Standards (U.S. GAAS) issued by the Auditing Standards Board (ASB) of the American Institute of Certified Public Accountants (AICPA) through the AU-C sections, which are current as of February 2026 and continue to be updated on an ongoing basis. The AICPA explicitly identifies substantive differences between its standards and ISA, indicating that the national framework remains substantially converged with a post-2018 ISA framework. The jurisdiction is therefore assessed as Partially Adopted.

The ISA for Audits of Financial Statements of Less Complex Entities (ISA for LCE) has not been adopted in the jurisdiction.

Current Status: Partially Adopted

Ethical requirements for licensed professional accountants are established primarily through state accountancy legislation and related board regulations, generally based on the Uniform Accountancy Act model framework, together with the AICPA Code of Professional Conduct.

For members of the American Institute of Certified Public Accountants (AICPA) and many state board licensees, the applicable framework is the AICPA Code of Professional Conduct, which was comprehensively recodified in 2014 and has been updated on an ongoing basis through subsequent Professional Ethics Executive Committee (PEEC) revisions, including selected provisions aligned with post-2018 International Ethics Standards Board for Accountants (IESBA) developments such as non-compliance with laws and regulations, fee-related provisions, and revised public interest entity definitions.

For members of the Institute of Management Accountants (IMA), the applicable framework is the IMA Statement of Ethical Professional Practice, which was revised in 2017. While this framework is not a direct adoption of any version of the IESBA Handbook, it addresses the core principles of competence, confidentiality, integrity, and credibility and reflects substantial alignment with internationally recognized ethical requirements.

For audits within the remit of the Public Company Accounting Oversight Board (PCAOB), firms must comply with the PCAOB’s ethics and independence rules, including interim standards based on the relevant AICPA ethics requirements as in existence on April 16, 2003, to the extent not superseded by subsequent PCAOB rules. Entities under the Securities and Exchange Commission (SEC) framework must also comply with SEC auditor independence requirements.

Accordingly, no version of the IESBA Handbook has been directly adopted at the jurisdiction level. However, the national framework incorporates selected requirements that are aligned with post-2018 IESBA revisions through the AICPA Code, subsequent PEEC updates, and the IMA’s 2017 revised ethical framework. On this basis, the jurisdiction is assessed as Partially Adopted, as the framework reflects partial convergence with the 2018–2024 IESBA requirements but does not constitute adoption of the Code as issued.

Current Status: Partially Adopted

Public sector financial reporting standards in the United States are established through a domestic framework rather than through adoption of the International Public Sector Accounting Standards (IPSAS).

At the federal level, accounting standards are issued by the Federal Accounting Standards Advisory Board (FASAB) through the Statements of Federal Financial Accounting Standards (SFFAS), which are recognized as the generally accepted accounting principles for U.S. federal reporting entities.

At the state and local government level, standards are issued by the Governmental Accounting Standards Board (GASB) and constitute U.S. generally accepted accounting principles for state and local public sector entities. (gasb.org)

Neither FASAB nor GASB has adopted IPSAS, and there is no indication of formal plans to adopt IPSAS as issued by the International Public Sector Accounting Standards Board (IPSASB). While both standard-setters monitor international developments and may participate in international due process discussions where relevant, the jurisdiction-level framework remains based entirely on national standards.

Current Status: Not Adopted

Investigative and disciplinary arrangements in the United States are established through a multi-layered jurisdictional framework. The state boards of accountancy retain statutory authority to investigate and discipline licensed Certified Public Accountants (CPAs) and firms within their respective jurisdictions, including suspension, revocation, and monetary sanctions where provided by state law.

At the professional body level, the American Institute of Certified Public Accountants (AICPA) and a majority of state boards continue to operate the Joint Ethics Enforcement Program (JEEP), which provides coordinated investigative and disciplinary procedures for overlapping membership and licensure matters. The AICPA continues to indicate that the JEEP Manual of Procedures is designed to align with SMO 6 best practices. However, participation is not universal across all 55 U.S. jurisdictions, and therefore the framework is not fully comprehensive at the national level.

For public company audits, the Public Company Accounting Oversight Board (PCAOB) has independent authority under the Sarbanes-Oxley Act of 2002 to investigate and discipline registered firms and associated persons. This includes public sanctions, civil money penalties, revocation of registration, and other remedial measures.

The Institute of Management Accountants (IMA) also maintains a disciplinary framework for its members and Certified Management Accountant (CMA) designation holders through its ethics compliance procedures and Committee on Ethics.

Overall, the jurisdiction maintains established and operational investigative and disciplinary systems for major segments of the profession. However, because the framework is distributed across state jurisdictions and professional bodies and is not fully uniform for all professional accountants nationwide, the jurisdiction-level framework is not fully aligned with SMO 6

Current Status: Partially Adopted

In the United States, the financial reporting framework for domestic public companies is based on U.S. Generally Accepted Accounting Principles (U.S. GAAP) as issued by the Financial Accounting Standards Board (FASB) and recognized by the Securities and Exchange Commission (SEC) under the federal securities laws. Domestic issuers whose securities trade in the public markets are required to prepare financial statements in accordance with U.S. GAAP.

The United States has not adopted IFRS Accounting Standards for domestic issuers. However, the SEC permits foreign private issuers to file financial statements prepared in accordance with IFRS Accounting Standards as issued by the International Accounting Standards Board (IASB) without reconciliation to U.S. GAAP. This permission applies only to foreign private issuers and does not extend to U.S. domestic public companies.

The IFRS Foundation’s 2025 jurisdictional profile for the United States confirms that the SEC requires domestic issuers to apply U.S. GAAP and that there are no current plans to permit or require IFRS for domestic listed companies.

There are also no jurisdiction-level plans to adopt the IFRS for SMEs Accounting Standard.

Current Status: Partially Adopted

Relevant Organizations

American Institute of Certified Public Accountants (AICPA)

Chartered Institute of Management Accountants (CIMA)

Federal Accounting Standards Advisory Board (FASAB)

Financial Accounting Standards Board (FASB)

Governmental Accounting Standards Board (GASB)

Institute of Management Accountants (IMA)

National Association of State Boards of Accountancy (NASBA)

Public Company Accounting Oversight Board (PCAOB)

Securities and Exchange Commission (SEC)

Relevant Legislation

AICPA Code of Professional Conduct

PCAOB QC 1000, A Firm’s System of Quality Control

Sarbanes-Oxley Act of 2002

Securities Exchange Act of 1934

Uniform Accountancy Act

Relevant Publications

AICPA Peer Review Standards Update No. 2

IFRS Foundation, Jurisdictional Profile: United States (updated April 2025)

NASBA CPA Evolution resources

PCAOB Basics of Inspections

SEC approval of QC 1000 (2024)