Regulation of Financial Accounting and Reporting: the Pro-Regulation Perspective

It define the scope of judgment in planning financial statements by formulate the characteristic, activity and restrict of financial accounting and reporting. It also increases different of financial statements by reduce the number of other accounting methods. If standards were come from a reasonable style of concepts. Likewise, reporting requirement will be more constant and fair because they will record accounting base on former set of concepts. Moreover, the setting requirement will be more economical because problem should not be discuss from different position. In additional, it help to reduce accounting common error and political

Abstract: On October 11, 2011, the Public Company Accounting Oversight Board (PCAOB) proposed a new rule. The rule is meant to name the engagement partner and other key participants who play a role in preparing audit reports. PCAOB believes that new rule would help to get more information and would be useful to investors, creditors and other financial statements users. After six years of debate over the intended and unintended consequences the PCAOB concluded and issued the rule on December 15, 2015.The objective of my research was to reflect my expectations for the consequences, both intended and unintended of the Public Company Accounting Oversight Board of the new rule. The PCAOB’s final article “Improving the transparency of audits: Rules to require disclosure of certain audit participates on a new PCAOB form and related amendments to auditing standards” release No. 2015-008 issued on December 15, 2015 was very crucial for my research because it gives first hand perspective of the new rule.

The standard setting process is governed by the FASB, but the decisions they make ultimately affect the corporations that have to adopt these accounting standards. Operating in a manner that does not take into account the views of the governed bodies would be unjust and would create a large disparity between the two bodies. Knowing that accounting rules affect human behavior, Dale Gerboth argues that politics is the only way to command others to follow rules. Political accounting is the main reason that accountants in the first place had a positive perception and the confidence of the public. Since the government has an inside knowledge of the goals and health of the economy, they can direct accountants to determine what is the most relevant information and display the information in a way that is most beneficial to the final users. By having government influence in politics, it sets a restriction on behavior whether voluntarily or by force. These restrictions were agreed upon by all parties in the society and represent the best interest of the society. Without government influence in accounting standards, standards would be chaotic as there would be no focus on what is the best for the economy. In conclusion, as governments have the best vision, and understand the weaknesses of the economy they are most capable of providing input for the accounting

In this report I will be describing how legislation and accounting concepts, could affect a business company’s accounting policies. I will also be talking what Acts contain, concepts and their importance, and also accounting policies. I will be supporting my work with examples.

Historically ,it is seen that there are numerous number of disputes in the field of financial reporting among different professionals, regulators and theoretitions .most of these disputes are related to the valuation of financial reporting components.the current curve in the progress of valuation is the push for and against the fair value approach.the purpose of this research is to examine the arguments on the use of fair value accounting and to identify the issues related to implementation of fair value accounting standards. Further, the results of literature related to role of fair value accounting within financial crisis are also investigated.

It is important to be aware that financial accounting is an area in accounting where all financial transactions of the corporation are recorded in. It is a process that through time has become the systematic way for record keeping of all off a corporation’s transactions in order to be able to report the data in an efficient manner. It is because of this that is so highly regulated by the reporting authorities. The framework laid out by the IASB. It is within these standards that all the rules and regulations relevant to all aspects of accounting are laid out. These standards are prepared and explained in a very simplified, yet comprehensive manner, in order to allow financial accountants to perform their day to day operations. Moreover, it is to ensure that there is conformity and uniformity in all aspects of

There are many aspects to be considered in regards to accounting regulations such as economic, social, and political factors. These factors prohibit the issue regarding regulations form being clear cut or easy to decipher. The economic, social, and professional perspectives in which the issue can be viewed from often have significantly different vantage points and often represent competing interests. However, without regulation it is difficult to maintain a healthy economy and provide individuals a fair chance at achieving their own financial objectives. Therefore, while not all regulations effectively serve their stated purposes, the goal for regulators and legislators should be to improve the effectiveness of regulations and not to try to do away with them completely. In the last decade there have been many examples of how deregulation has worked to destabilize the global economy.

In this paper our objective is to understand the concept and theories of accounting. The paper explores public interest theory, private investment theory and regulator capture theory. After this our

Then, comparability of information needs an explanation. This leads into either one standard for accounting procedures or different standards with firms obliged to mention which standard they have chosen. In the past, business fought constantly against the uniformation of standards and the problem of the latter suggestion is that it needs skilled users to evaluate the impact of the different standards on the financial statement. As only a limited group will be able to do this, the number of possible financers is reduced. Capital could become more expensive since in free market systems a broader supply of capital should result into lower prices for capital and the reverse effect is true.

Moreover, information in the free market is meaningful which enhances investors’ understandability of the market thus creates an efficient financial reporting. Trading accounting information as a commodity, the most common incentive of free market reporting is to offer information which assists the investors to evaluate the firms’ operating earnings (Asher, Sarah and Benjamin, 2011). Finally, the free market possess a great magnitude of information. Even if the disclosures in a free market is voluntary, it contains a large scope of information which benefits the decision makers. Lang and Lundholm (1996) indicated that companies with supplementary information disclosures predict future earnings more accurately. Under the non-GAAP metrics in free market, another benefit is high relevance of information. In the unregulated environment, the value of information is more relevant as price and earnings are highly related (Albring et al. 2010). Even though the analysts failed to predict the occurrence of global financial crisis (GFC), the quick spread of bad events offers valuable information to the users and enables the participants to anticipate future risks which helps the vulnerable market recover in a high speed (Wilson, 2011).

Thus, the objectives of financial reporting are crucial because it’s a way of formally providing reports of financial actions and files within a firm to owners, stockholders, governmental tax authorities. Moreover, they provide a consistent approach for firms in order to be more transparent, avoiding any scams which might takes place within the fiscal (money related) records.

Earnings management reduces the quality of financial reporting, it can interfere with the resource allocation in the economy and can bring adverse consequences to the financial market. This essay analyses both, causes and motives of earnings management as well as possible remedies. Therefore, it is not surprising that market participants, legislators, regulators, and academics are concerned with the need to control financial reporting abuses.

We will examine the complexity of financial reporting and how it applies to Positive Accounting Theory (PAT). We will also discuss how measurement of financial reporting effects the complexity of financial statements in terms of fair value and historical cost methods. We will use supporting evidence from peer reviewed journal articles to support our argument. We will then present our findings and recommendations to the Corporate Governance Council Chairman of Australian Securities Exchange (ASX).

Other Regulatory authorities (such as, Company Law Board, SEBI, Stock Exchanges, Tax Authorities etc.) would like that the financial statements prepared are in conformity with the specified laws and rules, and are to safeguard the interest of various concerned

Despite the controversies in the practice of accounting profession, in-roads were made towards strengthening the regulation of financial reporting