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Financial and Accounting Regulation: Turner Review - Essay Example

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Financial and Accounting Regulation: Turner Review

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 ...Show more

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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…
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