Are more regulations needed? Why or why not?
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The new hires will be involved in gathering corporate information for audits. They will need to make decisions on corporate responsibility based on regulations. As the manager, you feel corporations don't need to be regulated. You believe the market will take care of itself because poor management is what causes companies to eventually go out of business. One of your new hires, Tresh, says she disagrees with you. She feels corporations need to be regulated based on historical behavior. Because of Tresh's statement, you discuss your understanding of the regulatory history of accounting and corporations. Include the following:
-The history and role regulation has played in U.S. accounting applicable to standards and reporting.
-The 2 regulations that are the most important and why.
-Are more regulations needed? Why or why not?
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Solution Summary
Whether more regulations are needed for corporate information are examined. The history and roles regulations has played in the United States accounting applicable to standards and reporting are examined.
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During the industrial revolution in the early 1900s accounting became important due to growth in business sector which in turn led to the need for improved organization in the accounting sector. One of the earliest accounting organizations includes the America Institute of Accountants and this body played a major role in developing early accounting standards. In 1934 the Securities Exchange Act was passed which led to the establishment of the Securities and Exchange Commission which was given responsibility to create accounting practices and principles and to audit public companies financial statements. The American Institute of Accounts which is today known as the American Institute of Certified Public Accountants was tasked with the responsibility of creating auditing standards.
In 1939 the American institute of Accountants developed auditing standards and two years later established guidelines to be followed by independent auditors. The institution continued to release a series of statements providing guidelines for auditors and in 1972 the statements were codified into one presentation which is referred to as Generally Accepted Accounting Standards (Bateman & Co., 2002). The ...
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