ACCOUNTING AND FINANCE

Accounting and Finance

Accounts Regulations

Introduction

Regulation is an administrative legislation which constitutes rights and assigns responsibilities. Accounts are regulated in order to provide financial information about the regulated business which can be used by the regulators, investors, consumers, industry and shareholders. The information provided by the regulated accounts are more wide and focused instead of the information contain in the statutory accounts. In this essay we will discuss the importance of the regulated accounts and how accounts are regulated in the UK.

Discussion

Many people think that accountants work for their own company rather than providing the realistic financial information to the public. When accounts are regulated, they forbid companies and accounting companies to conceal the truths regarding the company and its financial position and status from the investors and general public. The importance of the regulation is that they oblige companies and their accountants to be more clear and straightforward regarding their financial relations and demonstrate their true financial picture to the people (www.ifrs.org).

Regulation on accounts, play a significant role in the stock market as there are huge mixed perceptions regarding the investment in the publicly traded companies. This mixed perception is the capabilities of company to hide the financial distress which usually happen when company mislead the accounting policies. When accounting laws are implemented in any firm they lower this perception which forms a dilemma within the investors. Companies are subject to this legislation which will provide data that represents the accounting situation (following levels of analysis required) from the budget data through activities of reclassification and algorithms in accordance with GAAP (Richman, 2002, pp. 1).

Moreover, when accounts are regulated under the accounting laws and policies than corporation and public organization will held responsible for their actions. Hence, when laws are strong, than this will safe the ...