StudentShare solutions
Got a tricky question? Receive an answer from students like you! Try us!

Research Paper example - Finance: Fair value accounting during the financial crisis

Only on StudentShare
Masters
Research Paper
Finance & Accounting
Pages 22 (5522 words)
[Name of Student] [Name of Instructor] [Name of Course] [Date] Fair Value Accounting During the Financial Crisis Part 1: Introduction: The financial crisis of 2007 has been a basis of a number of problems being faced by the international business and accounting profession in particular…

Extract of sample

The impact of the overall situation of financial crisis had a severe reaction on the social institutions as well, leading unemployment rate to increase since a large number of finnacinal institutions had to face failures and ultimately, bankruptcy. As a result, a number of debates have been observed between investigators that the credit crunch was due to the misinterpretation of assets and hedging strategies in the shape of subprime loans and mortgage backed securities (Deff and Phelps). The major concern of the debaters was the implication of fair value accounting systems which led to the situation where it has been blamed for facilitating the sustainment of the financial crisis which has led to massive government bailouts of financial institutions. As a result, it was marked that the Bush administration, FASB and SEC responded to the financial crisis with Acts and amendments to take a grasp of the situation (Twaronite and Levine). The aim of this paper is to critically evaluate the role of the fair value accounting’s role in the financial crisis. This will be done by carefully taking an in-depth analysis of the accounting systems and alternatives. Also, different factors such as subprime loans, mortgage backed securities etc, have led the fair accounting system to affect the financial turmoil. ...
Download paper
Not exactly what you need?

Related papers

International Financial Strategies
The paper tells that the concept of corporate governance has undergone tremendous changes since its origin. Managements always pay attention to update their corporate governance strategy in accordance with the needs of time. The corporate governance policy also maintains the relationship between the stakeholders and the objectives of the organisation. Top level mangers always focus on the impact…
12 pages (3012 words)
Finance and Accounting Essay: Post Financial Crisis: Role of Audit
The paper highlights expectation gap and the framework of extended audit which could make the auditor’s report more informative for the general public so that they can make more informed decision. Critical Analysis of Extended Audit As per the research commissioned by ACCA it was found most of the readers of the annual report and financial statements were not much interested in the auditors…
10 pages (2510 words)
Contemporary Issues in accointing and finance
Public interest is the collective well-being of people and the institutions they serve. Failure to fulfil this mandate can have very serious adverse consequences such as what happened to the Arthur Andersen auditing firm for being complicit in the Enron scandal. This paper examines the role of accounting in serving public interest versus self-interest when accountants and auditors are engaged for…
6 pages (1506 words)
Regulatory Response to the Financial Crisis which began in 2007
1). The debate still rages as to the real cause of the crisis. King (2011, p. 48) indicates that a major contributor to the global crisis was global imbalances which requires rebalancing of global demand in order to facilitate a sustainable recovery. This paper provides a brief synopsis of the events and the regulations which followed in the US, Germany, UK, Netherlands and Spain. According to…
8 pages (2008 words)
Fair Value Accounting and Subprime Crisis
A decade of house price increase up to 2006 soon saw a sharp fall in housing prices and the rise in foreclosure (Healy et al, 3). The benchmark for financial instruments was provided by the Mortgage Bankers Association that soon reported the foreclosure and collapse of mortgage securities as well as the Federal Reserve. The mortgage-backed securities were discovered held in portfolios in banks and…
3 pages (753 words)
Financial Advance accounting
IFRS actually lays down principles and rules that are to be followed by an organisation while reporting its financial information through the financial statements. The accounting standards in accordance with IFRS are supposed to serve the public organisations all around the world as compared to the existing local standards that are prevalent in a particular country where the company operates its…
8 pages (2008 words)
Need to do a critical review on the article: Power, M (2010) 'Fair value accounting, financial economics and the transformatio
The article concludes that four conditions necessitated the significance of fair value accounting. Summary The author draws from several summaries and analyses to discuss the debate about fair value. The discussion focuses on how the notion of accounting and reliability emerged and was articulated before the financial crisis. Further, the paper examines the rise of financial economics as a…
4 pages (1004 words)