Uk financial regulatory framework essay

The existing fsdc will continue to exist, though with modified functions and a statutory framework. A relevant and reliable makes it easier for users of financial information to analyse those statements.

Standardisation would mean that there would only be one technically correct method identified for each aspect of accounting. The regulatory framework for the preparation of financial statements is a set of rules, known as accounting standards put in place with the help of conceptual framework to ensure that all financial statements are reliable, useful and not in any way misleading.

For instance, current assets such as cash or inventories must be grouped separately from long-term or fixed assets such as land and equipment. Likewise, a receive-fixed swaption protects its purchaser from falling interest rates.

Indeed, the world has warmed up for IFRS. Enhancing risk management at financial firms. G Nicholson and M Salib. Owners often use the leading company of an industry for the comparison process.

Financial Reporting Theory Essay

Business owners often conduct a trend analysis when reviewing financial information. Low interest rates, the favourable macroeconomics environment and global imbalances made financial firms keen on searching for higher returns, which in turn led to excessive leverage and uncontrollable behaviour.


This global financial meltdown has affected the livelihood of people all over the world. Conclusion It is questionable whether the current regulatory regime is sufficient in regulating the banking industry,[18] although significant improvements have in fact been made. Convertible Preference Shares Convertible preferred stock is preferred stock that includes an option for the holder to convert the preferred shares into a fixed number of common shares, usually anytime after a predetermined date.

Information cannot be reliable if its bias. Leverage in the financial system will be reduced significantly, as a result of more rigorous risk management and due diligence, as well as regulatory changes. Ideally, the understanding of the corporate governance and the agent-principle relation is relevant for the researcher to conceptualize.

Reliable Reliable information must have the ability to be depended upon by the users to have faithful information, to do this the information but be free from error and bias. Having a regulatory framework is essential to these groups. Conclusion In conclusion, legal and regulatory frameworks are necessary for organization and assess its implications for users of the financial statements.

Additionally, the practice of IFRS on substance over form is to recognize the commercial substance as opposed to legal form. To overcome this problem, risk management needs to be given higher priority which would help strengthen risk capture and build capital which is in proportion to the risk these business models involve.

This is evident by the recent financial crisis which seemed to demonstrate that banks are capable of taking extortionate risks without any intervention. A swaption is an option granting its owner the right but not the obligation to enter into an underlying swap.

Many stakeholders are skeptical about the possibility of the benefits overcoming the transition costs Yoon, This information will then assist the manager in making a decision on whether to keep that product or to scrap it.

Business owners use comparison to gauge how well their companies operate under certain market conditions. To lay down a set of design principles that will guide the development of institutional frameworks and regulation for achieving financial inclusion and financial deepening.

Hence, it was suggested that it was only a matter of time before the FSA was abolished completely: Relevant financial information is presented in a structured manner and in a form easy to understand. The Financial Services Authority (FSA) is an independent non-governmental body (quasi-judicial body) and a company limited by guarantee that regulates the financial services industry in the United Kingdom.

Financial Sector Appellate Tribunal The present SAT will be subsumed in fsat, which will hear appeals against rbi for its regulatory functions, the unified financial agency, decisions of the fra and some elements of the work of the resolution corporation. Regulatory framework for financial reporting Introduction In the next couple of pages the author will firstly discuss the main advantages of the crossroad growing adoption of IFRS, and how does it particularly benefit investors and managers.

Essay on UK Financial Regulatory Framework - Introduction The financial regulatory framework in UK is called GAAP or General Accounting Accepted Practice and is the body responsible for the rules and regulation that companies within the UK must follow when reporting financial information.

The Financial Services Act (FSA) came into force on the 1st of April in order to establish a new regulatory framework for the financial system.

Under the new Act, the Financial Services Authority (FSA) was replaced by two new regulators; the Financial Conduct Authority (FCA) and the Prudential Regulation Authority (PRA).

The regulatory framework in the UK and use of international accounting standards To understand the purpose of financial reporting first you have to understand the concept of financial accounting theory, simply _Webster defines theory as: ‘systematically organized knowledge, applicable in a relatively wide variety of circumstances, a system of assumptions, accepted principles and rules of.

Uk financial regulatory framework essay
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