6.4 Regulatory Requirements

Regulatory requirements govern how companies should prepare and disclose their financial statements. These regulations vary by country but generally aim to ensure transparency, consistency, and accuracy in financial reporting.


International Financial Reporting Standards (IFRS)

The IFRS are a set of accounting standards developed by the International Accounting Standards Board (IASB). They provide a common language for financial reporting, making it easier to compare financial statements across different countries.

Generally Accepted Accounting Principles (GAAP)

GAAP is a set of accounting standards used primarily in the United States. They provide guidelines for financial reporting, ensuring consistency and comparability among companies.

Regulatory Bodies

Various regulatory bodies oversee financial reporting and disclosure:

  • Securities and Exchange Commission (SEC): In the United States, the SEC regulates public companies and enforces compliance with financial reporting standards.

  • Securities and Exchange Board of India (SEBI): SEBI regulates the securities market in India and enforces compliance with financial reporting standards.

  • Financial Conduct Authority (FCA): In the UK, the FCA regulates financial markets and ensures compliance with financial reporting standards.

Compliance Requirements

Companies must comply with various requirements, including:

  • Timely Reporting: Companies must prepare and disclose their financial statements within a specified time frame.

  • Disclosure of Material Information: Companies must disclose all material information that could affect stakeholders' decisions.

  • Internal Controls: Companies must establish and maintain effective internal controls over financial reporting.


Last modified: Monday, 21 October 2024, 3:41 PM