The financial regulatory framework in UK is called GAAP or General Accounting Accepted Practice and is the body responsible for the rules and regulation that companies within the UK must follow when reporting financial information. There are three main sources of rules governing accounting regulation in UK namely: the companies’ act 2006, (which incorporated EU accounting directives), UK accounting standards (FRSs and SSAPs) and London Exchange Company listing (International Accounting Standards). Recently, the FRC (Financial Reporting Council) issued a new directive which will require (except the small companies, which can use FRRSE) to report in accordance with FRSI or IFRS by the end of 2015.
There has been much debate over the advantages and disadvantages of the regulation of financial reporting. The central argument put forward by proponents of regulation of financial reporting is that a lack of regulation of the market results in severe market failure and regulation mitigates the chance of such failure. On the other hand, proponents of the free-market approach argue that the private incentives for self-regulation and production of credible financial reports are such that regulation is unnecessary and often worsens market collapses- the opposite of its intended purpose. This paper will argue that whilst regulation is necessary to mitigate market failure and serve the public interest, it is important to consider that regulation has in some cases caused financial crises. The global economic crisis has “ignited worldwide debate on the issues of systemic risk and the role played by financial regulation in creating and exacerbating the crisis” (Bushman and Landsman 2010: 259).
The first part of the paper introduces a...
... middle of paper ...
...ulating corporate reporting. a critical review of arguments. ‘Accounting and Business Research’, Vol. 40. , pp. 275-77.
3. Menassa, E, 2010. the case for accounting regulation. a theoretical approach, 1, 107.
4. Ward, C. D, 2013. Financial Accounting and Reporting. An International Approach, 1, 2 a
5. 2013. . [ONLINE] Available at: http://www.accaglobal.co.uk/content/dam/acca/global/PDF-technical/financial-reporting/tech-tp-fofr3.pdf. [Accessed 07 December 2013].
6 .Financial reporting J. Haslam and D. Chow AC3091, 2790091 http://www.londoninternational.ac.uk/sites/default/files/programme_resources/lse/lse_pdfubjet_guides/ac3091_ch1-3.pdf/s.
7 . 2013. . [ONLINE] Available at: http://financial.kaplan.co.uk/Documents/ICAEW/Financial_Accounting_Chapter_1.pdf. [Accessed 07 December 2013].
8 KAPLAN, Kaplan, 2012. ACCA PAPER 7. 2nd ed. uk: KAPLAN PUBLISHING. PAGE 36
Need Writing Help?
Get feedback on grammar, clarity, concision and logic instantly.Check your paper »
- Abstract The essay is a critique about the effect of financial crisis in Asia and its implications on macroeconomic perspective. The first theme of financial crisis is about financial regulation and supervision. The main issues in this concept are related to impact of crisis in East Asia. The down turn in Asia was larger than expected in the history of Asia and this resulted to various implications on individual and institutional level. Another area of concern is the implication of the recent financial crisis in the banking sector and stock market.... [tags: Economics ]
1192 words (3.4 pages)
- The New Zealand (NZ) Framework for Financial Reporting is in the process of changing since 2009, as a result of the review of the statutory reporting requirements in New Zealand by Ministry of Economic Development (MED) and the Accounting Standard Review Board (ASRB). The mainly recommendation was to remove small and medium sized companies from the statutory reporting framework (Ernst & Young, 2013, p.11). This New Zealand Framework for Financial Reporting 2010 (NZ Framework) was issued by the New Zealand Accounting Standards Board of the External Reporting Board (XRB) in 2011.... [tags: framework, economic, accounting]
933 words (2.7 pages)
- Introduction: From the beginning of the 1990s, the global financial system has entered a phase of unprecedented restructuring, marked by the increasing integration of financial markets and increased economic interdependence. This process, known under the name of financial globalization allows companies better access to financing, offers investors a greater possibility of investment and thus increases the liquidity of the global economy. However, this financial globalization has enormous risks. Indeed, creating an interconnection between national financial systems, it facilitates the transmission of shocks, contagion .... [tags: Financial Globalization]
3149 words (9 pages)
- The preparation and presentation of financial reports is intended to convey faithful financial performance and position of an entity to its stakeholders to enable them make economic decisions. In preparing these financial reports, managers tend to make a number of assumptions in arriving at the figures they present. As in positive accounting theory (Watts and Zimmerman, 1978), there tends to be a degree of self-serving interest by managers as agents. In other words, to ensure a central point of interest, there must be some guiding principles within which financial reports are prepared to minimize the effect of this agency relation.... [tags: International Financial Reporting Standards]
1000 words (2.9 pages)
- INTRODUCTION Modern man tries to protect himself and his possessions against many risks like illness, accidents, death, theft and liabilities. These interests can be protected in various ways: (a) He can take preventative measures to limit loss such as wearing a safety belt while driving a vehicle or installing smoke detectors in a factory; or (b) He can save money and with time build up a private fund; or (c) Co-operate with other legal subjects to collectively cover losses that have been incurred.... [tags: business analysis, regulatory framework]
1047 words (3 pages)
- Introduction Ethical standards in the financial services industry were severely tested in light of news of outright fraud, Ponzi schemes, lack of regulatory oversight, and the likes in recent times. These gross violations, although shocking, are not a novelty especially when it comes to the money management business. But the sheer size, frequency and egregiousness of these recent scams and scandals highlight the lack of basic ethical standards in the industry with total disregard of their customer’s interests.... [tags: ethical standards in the financial services system]
1397 words (4 pages)
- INTRODUCTION The Malaysia financial system is structure into two major categories it is financial institution and financial market. But I will cover about financial institution only. The role of financial institutions is to resolve the problems caused by market imperfections. Without financial institutions the information and transaction costs of financial markets transactions would be excessive. Under financial institutions there are two type first banking system and non-bank financial intermediaries.... [tags: financial market, risks, institutions]
2136 words (6.1 pages)
- The Nigerian banking and financial services competitive environment has changed radically. From the heydays of the financial services and banking boom of the 1990s, when the country was dotted with over 200 financial institutions – commercial banks, merchant banks, community banks, mortgage banks, finance houses - to the new dispensation in which the country progressed fully into the era of universal banking with 24 banks operating in the country (Sanusi, 2012). The faltering Nigerian economy and the banking industry experienced a systemic crisis in 2009, triggered by the global economic crunch, which was followed by the collapse of the Nigerian stock market.... [tags: Bank, Financial services, Central bank]
852 words (2.4 pages)
- “Companies’ Annual Reports have become increasingly complex over the years, sacrificing understandability for complexity”. An annual report is a detailed report for shareholders and other business partners on a company’s activities throughout the year. It is a legal requirement from the Companies Act 1985/9 that requires companies to publish their annual report and accounts. Its purpose is to present a true and fair view of the company’s annual performance and provide financial statements that are useful to existing and potential investors, shareholders, lenders and other creditors.... [tags: Financial statements]
1067 words (3 pages)
- Developing and using a job searching FRAMEWORK approach has the tendency to ensure a more suitable matching results of personal job attainments and the employing organization 's business and operational requirements. It is composed of four (4) distinct arts. They are: Mindset. This section is a continual reminder of the most fundamental principles driving the FRAMEWORK. Entry Point. This sections triggers considerations of the commonalities desired as the individual enters into a position and reminds one begin to relate it immediately to other incremental positions with related functionality.... [tags: Employment, Time, Future, Regulatory Focus Theory]
1743 words (5 pages)