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Publicly Accountable Enterprises - Definition
Simplified Definition (not authoritative)
Publicly Accountable Enterprises are profit-orientated enterprises that have
responsibilities to a large or diverse group of stakeholders and can include:
- Publicly listed companies
- Enterprises with fiduciary responsibilities, such as banks, insurance companies,
credit unions, securities firms, mutual funds and investment banks
- Certain governement corporations
Formal Definition from Mar 2009 Exposure Draft
A Publicly Accountable Enterprise is an entity, other than a not-for-profit organization, or a government or other entity in the public sector that:
- has issued, or is in the process of issuing, debt or equity instruments that are, or will be, outstanding and traded in a public market (a domestic or foreign stock exchange or an over-the-counter market, including local and regional markets); or
instruments in a public market; or
- holds assets in a fiduciary capacity for a broad group of outsiders as one of its primary busineses.
Banks, credit unions, insurance companies, securities brokers/dealers, mutual funds and investment banks typically meet the second of these criteria. Other entities may also hold assets in a fiduciary capacity for a broad group of outsiders because they hold and manage financial resources entrusted to them by clients, customers or members not involved in the management of the entity. However, if an entity does so for reasons incidental to one of its primary businesses (as, for example, may be the case for some travel or real estate agents, or cooperative enterprises requiring a nominal membership deposit), it is not considered to be publicly accountable.
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