Discuss the reasons why we need a regulatory framework for financial Essay

Discuss the reasons why we need a restrictive framework for financial reporting. What are the advantages and disadvantages of making accounting rules by law as opposed to using IASB standards - Essay ExampleDue to globalization, many UK companies are now getting subsidiary companies in other countries, which function under antithetic financial parameters and there whitethorn be a need to modify the live oning regulatory and financial frameworks (Haller and Walton, 2003). When different financial accounting standards exist in different countries, it may be necessary to harmonize them and this can tho be achieved by dint of modification of the financial regulatory networks. In this context, a report published by the Institute of lease accountants in Scotland offers the view that the current position in the context of globalization is such that there is an eer increasing volume of accounting rules, which is not sustainable in the long run (ICAS, 20062). Its only principles base d accounting is likely to be beneficialDomestic law and regulation has changed in different ways. First, the London Stock exchange was once self regulatory but it is no longer the tilt authority within the U.K. The UKLA (UK Listing Authority) which is a part of the Financial Services Authority (FSA) is now the responsible for(p) authority for this purpose. Second, professional bodies which are a part of the UK Accountancy profession, have set up their protest private regulatory framework the Accountancy Foundation to provide independent oversight of their auditing standards, ethical standards and regulatory activities, including disciplinary procedures. New regulations have also been issued in respect of limiting the remuneration paid to directors and the Companies puzzle out has also been modified (Fearnley and Hines, 2003). These changes in the domestic law mean that the framework which existed earlier and was largely self-regulatory may no longer be adequate.Bullen and Croo k (2005) have explained why a conceptual framework is needed. some(prenominal) the FSAB and IASB, share a common goal of ensuring that their standards are principles