Essay on Government Regulations: Accounting

1676 Words 7 Pages
Charlie Munger once stated, “You have to know accounting. It’s the language of practical business life.” This statement emphasizes that accounting has become the center of the business world. With the world now being focused around businesses and the idea of how to make the next dollar it’s obvious that the accounting field is rapidly becoming the most influential field in the world today. With these occurrences comes regulation, and when I say regulation I mean stiff government regulations on how financial reporting is done. There are many theories as to why there is an increase in accounting regulations. One is the emphasis on the accuracy of accounting period, another being the development of ethical codes being promoted in college …show more content…
FASAB created four objectives to ensure the quality of financial reporting with them being: budgetary integrity, operating performance, stewardship, and systems and controls. Budgetary Integrity would help provide information to determine how budgetary resources had been acquired and if that transaction was properly done through legal processes. Budgetary integrity also presents the status of its resources and if these statuses were consistent with information on assets and liabilities. Operating performance helps users of financial reporting evaluate the reporting entity’s service efforts, costs, and accomplishments. It also evaluates the manner in which their particular efforts and accomplishments had been financed as well as the entity’s handling of its assets and liabilities. The third objective, stewardship, evaluates how the nation is affected by the governments operations and investments while also assessing how the government’s financial condition has changed and how it could change in the future. The systems and controls objective basically sees if the administrative controls are up to par to ensure accurate reporting. All of these objectives were created by the FASAB in an effort to establish a clear sense of what they expected in an entity’s financial reporting. FASAB also created standards from which it expected
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