Financial regulation is a tool used by financial institutions like the banks, investment institutions and agents as well as brokers so that they can meet the obligations, guidelines and restrictions set upon them by government and international agencies concerned with the financial sector. Financial regulations have been formulated with the purpose of protecting investors and clients to financial institutions from manipulation and exploitation from the management and the dealers of the institutions. The regulations also ensure that financial institutions will be in a position to refund their customers incase it ends up splitting due to poor management and other related problems (Vinten, 2005, p220). It is within the mandate of financial regulation to ensure that there is not discrimination in lending loans; an individual operating a grocery must be accorded equal rights and opportunities like a company manager does (Ely, 2008, p1). The regulatory tool ensures that market operations are not interfered with which include interest rates, market prices. The tool also ensures that the dealers and providers of financial services have the capacity to carry out their operations competently, for example, such individuals must be having the required academic qualifications in the field of accounting, finance, economics and marketing. The personnel must be certified by financial and accounting bodies either internationally or nationally, they must posses a certificate that allows them to carry out the operation, and that their organizations must have enough stock to sustain their business so that they can remain relevant in the market. Financial regulation also ensures that the financial organization remains confidential and secretive because it is a sensitive organ. Ely (2008, p1) explains that in 1970 the Congress established a Bank Secrecy act which was aimed at reducing the secrecy but not promote it since all banks were required to develop and present all reports on transactions especially currency to the department of Treasury for regulation purposes. Disobedience and non-abidance to the law governing the institution is minimized with financial regulation. Financial and accounting regulations are formulated by experts in the sector who could be government employees or private practitioners who have several years experience in the sector and they should be people who demonstrate high level of integrity whole round, they should not have had any financial scandals in their history (Ciro, 2012, p159). Individuals linked with corruption either with local or international companies does not qualify to sit in a panel formulating such laws and policies. Financial regulation disqualifies a company or institution that is operating irregularly from the market or issue warnings. For example, the central bank of a given country, if their currency drastically drops as compared to other currencies it is doing business with; the governor and top management of the bank are questioned of their integrity as to why such problems arise (Giorgio, Noia and Piatti, 2000, p6). Financial committee within a government has the powers to suspend the individual after critically scrutinizing the persons so that the problem may be solved immediately because setbacks in the economic sector may be experienced which may put the country in a
Financial and Accounting Regulation: Turner Review Instructor Institution Date Financial and Accounting Regulation: Turner Review Regulation refers to managerial laws and rules that encompasses rights and assigns duties. Different organizations have different ways of developing their laws and policies that are aimed at improving the functioning of the organization…
Friendly takeovers simply occur when one organization tenders an offer to another organization and the board of directors accepts or declines the offer. In the corporate world, where publically traded organizations have a multitude of owners – indeed, in the United Kingdom the takeover only refers to publically traded companies -- the process becomes complicated, and the potential for the hostile takeover emerges.
Academic research has greatly contributed to the development of accounting and to the techniques of financial regulation. In particular, it has contributed much in the development of accounting principles and theory (Coetsee 2010, p. 1). The relationship between academic research and theory is two-way because the theories improved or forwarded by academic research have advanced accounting science and the science of financial regulation (Coetsee 2010, p.
The lessons that the society learns from the biting effect of financial crisis help in making policies which intend to cushion the country from similar problem. The financial crisis that rocked the world in 1970s had devastating effects to the society. Economists and policy makers developed policies, which they thought could help the world to remain stable amid the challenges that come with economic meltdown.
Although more colleges are offering a fraud-examination course as an elective, basic knowledge of fraud detection and deterrence is essential to success in today's professional environment.
This is not to say that management should ignore social responsibility such as protecting consumers, paying fair wages, maintaining fair hiring practices and safe working conditions, supporting education and becoming actively involved in environmental issues.
Enron has developed into becoming a part of America’s top ten companies in the span of nearly two decades. Their sudden rise to power seemed impossible to many industries in the financial world. However, the scam which brought upon Enron success was discovered.
On the other hand, it is argued that financial market regulation imposes significant costs to an economy that outweighs the benefits (Benston, 1998).The debate remains unsettled. In this essay, the failure of financial regulation in UK in the light
The review aims at addressing the inadequacies of financial supervision and regulation which could not survive the global financial crisis. In an effort to develop a novel regulation system, the review has taken into account all the factors that led to the global financial crisis such as securitized credit market complexity and excessive leverage.
There are numerous driving and motivating factors that stimulated the implementation of the financial regulation. There are some driving forces that culminated the need of implementing financial regulations.
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