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

Discuss the reasons why we need a restrictive framework for pecuniary 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 different financial parameters and there may be a need to modify the existing 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 unaccompanied be achieved through modification of the financial regulatory networks. In this context, a report published by the Institute of chartered accountants in Scotland offers the view that the current position in the context of globalization is such that there is an ever increasing volume of accounting rules, which is not sustainable in the long run (ICAS, 20062). Its only principles based accounting is likely to be beneficialDomestic law and regulation has changed in different ways. First, the London Stock exchange was once self-importance regulatory but it is no longer the Listing authority within the U.K. The UKLA (UK Listing Authority) which is a part of the Financial Services Authority (FSA) is now the accountable authority for this purpose. Second, professional bodies which are a part of the UK Accountancy profession, allow set up their own private regulatory framework the Accountancy footing 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 ferment 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 Crook (2 005) have explained why a conceptual framework is needed. Both the FSAB and IASB, share a common goal of ensuring that their standards are principles