Should We Regulate Accounting?

Many people wonder why the idea of regulating accounting is becoming so popular. Due to past experiences with manipulating accounting figures, it is no wonder that accounting has been under so much scrutiny. This is why so many people feel it is time to regulate accounting, due to so many companies not abiding by the rules set forth. Because of the many harmful incidents that have occurred with different scandals and schemes, there has been a lot of mistrust in the accounting field. To regulate accounting will give confidence back to the public. Here are some of the benefits that will arise when we set higher standards to regulate accounting.

Most of the public feels that accountants are working in the interest of their own company and the companies they work for instead of informing the public properly. When you regulate accounting, any company and accounting firm is prohibited from hiding the truths about the company and its financial status from the public. Accounting regulation will force companies and their accountants to be more open and straightforward about their financial dealings and show their actual financial situation.

It will also play an essential role in the stock market when regulating accounting. There are many mixed feelings about investing in publicly traded companies because of the capabilities to hide a company’s financial distress. If you regulate the accounting laws, then it will lower the chances of a company manipulating any financial reports shown to the public, which is a dilemma that has happened in the past.

When you regulate the accounting laws, you will hold corporations and public organizations responsible for their actions. This is a crucial part of regulating accounting practices. With stricter laws to prevent fraud and prevent special favors, the public will be safer against fraud. To regulate the laws will let not accounting firms and businesses alike be aware that they will be held accountable for their actions. Not only will this give confidence back into the accounting field, but it will also deter fraudulent activities in the accounting industry due to the strict consequences.

The most crucial reason to regulate accounting laws is to protect the public. Whether it is a publicly-traded company or a company that gains a majority of investments from its workers, both alike need to be protected from fraudulent activities. This is very important and is why the government has leaned to regulate accounting and its laws and practices. It has been proven by experience to not have strong accounting guidelines in place and enforced, which only leaves room to lead to a disastrous result.

There are many mixed feelings regarding the ideas to regulate accounting. However, despite the mixed opinions, regulating accounting is vital. It is not only the responsible thing to do, but it will also safeguard the public from companies and fraudulent activities that could occur. Not regulating accounting laws and practices will leave room to gather more mistrust in the accounting profession.