The act of complying with government legislation and mandates requiring public companies to provide specific financial reporting and disclosure. Regulators include the SEC, tax authorities and banking authorities, such as the FDIC in the U.S. Various international versions of such mandates also are in place. There are three areas of compliance generally considered of greatest impact today. In the U.S., Sarbanes-Oxley strengthens rules regarding public audit, corporate responsibility, financial disclosures and brokerage practices, and specifies penalties for noncompliance. In Europe, IAS 2005 refers to the 15 countries in Europe moving to one accounting standard mandated by the International Accounting Standards Board, and adopted by the European Union. Basel II is focused specifically on global banks and financial institutions. Basel II ensures liquidity of those institutions for the protection of public trust.
