Panagiotis Papadopoulos
Published: 2011-11-23
Total Pages: 17
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Essay from the year 2011 in the subject Business economics - Accounting and Taxes, grade: 64, University of Westminster (Westminster Business School), course: Financial Accounting and Policy, language: English, abstract: Since the financial crisis in 2008 the topic regulation of the markets at all revived. The world was looking for guilty parties in Rating agencies, financial institutions, governments and lastly audit firms and institutions which gave them their working framework – the accounting standards. On the one hand the scream for more regulation in the private sector to protect the public good became louder and on the other hand scientists were warning of such overbearing steps because they would be damaging the economy. This issue provides the basis for this paper where accounting is seen as an eco-nomic good. Accounting information is not costless to produce for the corporations and it raises compliance costs. On the one hand managers are using accounting rules that minimize information costs and on the other hand shareholders want ac-counting rules that improve their ability to control and monitor the manager’s action. Theoretically, financial accounting and reporting should be objective, neutral and apolitical. However, the standard setting process can be influenced by external groups with different interests.