If the SEC does not agree with a standard issued by the private sector, it can:

• A. Automatically adopt the standard without changes.
• B. Refuse to accept the standard for use by public companies in the United States.
• C. Request the FASB to dissolve and form a new standard-setting body.
• D. Apply the standard only to private companies.

Answer: (B)

Verified step by step guidance

1. Understand the role of the SEC (Securities and Exchange Commission) in overseeing financial reporting standards in the United States. The SEC has the authority to regulate and enforce standards for public companies.
2. Recognize the role of the FASB (Financial Accounting Standards Board), which is the private sector body responsible for developing and issuing accounting standards (GAAP). The SEC often works closely with the FASB but retains the authority to reject standards if deemed inappropriate.
3. Analyze the options provided in the problem. The SEC cannot automatically adopt a standard without changes, as it reviews and evaluates standards before acceptance. Similarly, the SEC does not have the authority to dissolve the FASB or apply standards exclusively to private companies.
4. Focus on the correct answer: The SEC can refuse to accept a standard for use by public companies in the United States. This reflects its regulatory oversight and responsibility to ensure standards align with public interest and financial transparency.
5. Conclude that the SEC's refusal to accept a standard would prompt further review or revision by the FASB to address the SEC's concerns, ensuring compliance with regulatory requirements.