The Need for Regulation in Financial Reporting Essay

The globalization of business activity has resulted in the need for a uniform set of accounting rules in all countries. With U.S. corporations doing so much business in other countries, it is imperative that the SEC and international regulatory boards devise a set of rules and regulations that would benefit both parties. If this did not happen, international companies would be able to do whatever they wanted without repercussion because of the discrepancies in the differing sets of rules. Accomplishing this universal set of rules would allow companies to list securities in any market without having to prepare more than one set of financial statements. There have been so many

It is an important function of any organisation to regulate the external financial reporting. The legislation that governs the external financial reporting is Financial reporting act 2013 (FRA) and The companies act 1993 (Deegan & Samkin, 2013). The Regulation is required to safeguard the interests of those using the financial information but do not directly participate in the business. These users may be both primary and secondary. The information provided by the financial statements are used for making economic decisions by its users (NZASB, 2016a). The regulation of external financial reporting does not only help the external users

SFAC No. 8 addresses the cost constraint on useful financial reporting, “Cost is a pervasive constraint that standard setters, as well as providers and users of financial information, should keep in mind when considering the benefits of a financial reporting requirement.” (SFAC No. 8 BC 3.47) However, the ability to place a dollar value and fully enumerate a cost or benefit is almost an impossible task for standard-setters. Additionally, there is no way to successfully identify and measure all of the economic consequences associated with a new standard. The FASB should be applauded though for advancing uniformity in accounting standards, however; uniform financial reporting suggests a one size fits all approach. “Smaller, non-publicly listed firms (and their auditors) argue that accounting standards are formulated mainly for larger, publicly traded firms” and that “compliance costs are disproportionately higher and the

Upon reviewing your post, the insights I gain are the importance of companies following the rules and regulations enforced by The Securities and Exchange commission (SEC). In addition to the (SEC) financial accounting are also monitor by the Financial Accounting Standards Board (FASB) regulate the financial statements issued to shareholders. Zimmerman, J. L. (2014). I also realized the importance of companies making certain that the financial information posted, is accurate. By doing so, they help others such as stockholders and investors to make decisions that will be most beneficial to them.

As the business environment grows and companies find new ways to expand into their respective - or even new – markets, it is important that reporting standards stay up to date with changes and continue to assist companies in providing their users with useful accounting information. Information is labelled as being useful when it meets the

The purpose of this report is to research the accounting and reporting standards of the Financial Accounting Standards Board (FASB) and report the impact FASB may have on our company. The following research explains the history and purpose of FASB, the accountability requirements on public corporations, the effectiveness of FASB in setting standards in order to improve financial reporting in the public

The FASB mission is to “establish and improve standards of financial accounting and reporting that foster financial reporting by nongovernment entities that provides decision- useful information to investors and other users of financial reports.” (www.FASB.org)

This report is written as a response to the monograph in which the ICAEW published on how financial accounting disclosures can be improved. The aim of this report is to critically discuss and evaluate the worthwhileness of the recommendations made from a financial investor’s perspective. It is done by reviewing recommendations put forward by the ICAEW and analysing if each of the disclosure recommended is worth the effort while putting in perspective what effects these recommendations have on professional investors who are one of the primary users and consumers of financial statements. The report contains information mainly from the ICAEW report and the CFA institute report

This standard outlines the presentation of financial statements for general purpose financial statements, in order to ensure that there is compariablity between the entities reporting periods as well as between other industries reports. The standard discusses the minimum requirement for reporting content and guidelines for the structure in which it is to be set at. Paragraph 117-124 distiguishes the disclosure of accounting policies in relation to judgement. Management’s judgement made in applying accounting policies that may have effected significant amounts found in financial statements and the financial position. Seen in paragraph 125-133 ‘Sources Of Estimation Uncertainty’, it is vital that entities disclose the key assumptions made regarding future prospects and other uncertain estimates that are used in identifying carrying amounts of assets and liabilities. Along side this, the nature and carrying amount must be disclosed at the reporting date.

3.1 How quality is measured in relation to IFRS. The adoption of IFRS and why the change?................................................................................

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 analysis presents the impact of financial accounting regulations on business in Australia. The first part of the analysis provides the aim of financial accounting regulations and a brief discussion about different governing regulators in Australia along with their specific responsibilities.

Regulation is defined as a set of rules that is designed to control and govern conduct by authority (Deegan 2009, p.59). On the basis of this definition, Deegan (2009, p.59) has defined regulations relating to financial accounting as rules that are developed by independent authoritative body to govern the preparation of financial statements which are accounting standards. Since decades ago, there have been arguments for and against the existence of accounting regulations. With a stance of pro-regulation, this essay is going to examine the reasons that financial accounting and reporting should be regulated and the merits of accounting regulations.

The article discusses that in 1976 the U.S. Supreme Court ruled in one case that omitted financial statement information altering a reasonable investor’s decision proves the material nature of the information. The article continues by describing that lower courts earlier ruled that all financial information whether material or not must have full disclosure in a company’s financial statements. The rejection of the lower courts’ ruling by the U.S. Supreme Court gives the investor the ability to focus on the aspects of the financial statements that are most important by allowing the elimination of minute details (Sauer 2007, 317-357). In essence, this ruling allows for the elimination of financial information below the determined materiality threshold unless otherwise required by the ruling of a regulatory body.

The Financial Reporting Council (FRC) has recently released four new standards: FRS 100 Application of Financial Reporting Requirements; FRS 101 Reduced Disclosure Framework; FRS 102 The Financial Reporting Standard applicable in the UK and Republic of Ireland; and FRS 103 Insurance Contacts. FRS 100 basically describes who does what with the new UK GAAP. It describes which principles apply to which type of business; when a business can apply the reduced disclosure framework; and when a business should follow a statement of recommended practices, or SORP. FRS 101 lays out a reduced disclosure framework for entities. Certain entities can choose to use this reduced disclosure framework while creating their financial statements. FRS 102