Importance Of Regulatory Compliance Requirements For Managerial Accounting

Regulatory Compliance Requirements for Managerial Accounting with emphasis on Financial Institution Impacts

Regulatory compliance, ensures that financial institutions deliver fair dealing when conducting business with consumers and business partners. As a result, financial institutions have to ensure that their products, services and finance related activities, are in compliance with relevant laws, regulations and aligned with standards of good industry practice. Part of the ongoing effort of many financial institutions, is to reduce compliance risk. Compliance risk is the risk of legal or regulatory sanctions that can lead to financial loss or reputation loss for a company. Compliance risk may occur as a failure to comply with specific

In the event that financial institutions are fined for not complying with complex laws and regulations, they have to be financially prepared to sustain the cost of the civil money penalty. In some cases this penalty can result in millions of dollars. According to Cockins (2012) managerial accounting provides value through a process of proper decision making. The author also explains that managerial accounting, is viewed as the overall system that integrates and creates business information that helps establish the entity’s overall management system. The following image provides visual and representation of his

Usnick & R. Usnick, 2013). Based on the results and findings, financial institutions may be required to restructure their products, services or incorporate training procedures and standards that need to be understood by all bank personnel (L. Usnick & R. Usnick, 2013). Compliance policies applies to employees and temporary workers. Employees are responsible for adhering to compliance policies, guidelines and following standard operating procedures as applicable to each person’s role. This is an important component for a strong compliance