Regulatory Environment for Contemporary Accounting

Running head: CONTEMPORARY ACCOUNTING
Contemporary Accounting
Name of the Student
Name of the University
Author Note

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Table of Contents
Introduction......................................................................................................................................1
Discussion........................................................................................................................................1
Conclusion.......................................................................................................................................1
References........................................................................................................................................1

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Introduction
A regulatory environment for preparing the financial statements and reporting is essential
for ensuring that the needs of the financial statements users or the accountants in the businesses
are met with the least of the information of the transaction. This also enables make sure that all
the information obtained in the relevant economic arena is consistent and comparable. Due to the
global investment and growth in multinational entities, this field is an increasing international
one. Moreover, it increases the confidence of the users in the process of financial reporting and
regulates the company behavior and directors towards their investors (Campbell, 2016). The
standards of financial reporting are not sufficient to achieve the organizational goals and meet
the legal and market-based regulation. There are many elements of regulatory environment of
accounting and reporting that differs from county to country, a basic regulatory structure must be
according to the Market regulations, National law, National financial reporting standards and the
rules of Security exchange.
Discussion
The regulatory environment for accounting and financial reporting varies, according to
Marti & Scherer (2016) a clear description has been given for determining the environment of
U.K. The accounting environment of U.K has its own national financial reporting authority, the
Accounting Standards Board that is a part of the Financial Reporting Council issues the financial
reporting standards. The Companies Act 2006 is the main legislation influencing businesses in
the UK. However, there are also many other regulating body of UK, EU and even US legislation
like the Sarbanes Oxley Act that affect the countries accountability. There are also various
regulatory systems that are industry specific and affects the accounting process in the UK like

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the Financial Services Authority. The Financial Services Authority is a body that aims to obtain
the public accountability of the financial services industry. Moreover, the London Stock
Exchange for companies also provides regulations and provides the criteria for quoting the
values of shares in the share market.
Similarly, the regulatory environment of Australia aims in promoting integrity and
confidence within the investor in the economy, capital markets and corporations. The consistent
financial reports prepared in accordance with legislative requirements of the state (Woolcock
2016). In all Australian states and territories, the same standards of reporting apply. Australian
Businesses are required to report to the Australian Taxation Office (ATO), the Australian
Securities and Investments Commission (ASIC) and/or the Australian Securities Exchange
(ASX).
Financial Regulatory Framework in Australia was introduced on 1st of July 1998 as
recommended by Financial System Inquiry. It consists of three agencies with functional
responsibilities:
 The Australian Prudential Regulation Authority (APRA),
 the Australian Securities and Investments Commission (ASIC),
 the Reserve Bank of Australia (RBA),
The APRA is an integrated prudential regulator that takes care of the banking institutions,
general insurance and superannuation. It develops prudential policies that balance financial
safety and efficiency, competition, contestability and competitive neutrality (Fratianni, Willett &
Wihlborg, 2015).