The Governmental Regulation in Accounting Practice
The extent to which the state government should influence the policies of corporations has been the subject of numerous debates for quite a while. While seemingly providing a short relief to the company leaders in their efforts to guide the organization in a particular direction, state corporate governance, in fact, has a range of disadvantages. These disadvantages come out in full blue once the government abuses its powers in addressing corporate accounting practice. While the idea of self-regulating companies and the following dismissal of SEC do sound quite alluring, one must bear in mind, though, that the state regulation of major corporations, as well as less significant SMEs, should also be viewed from the legal perspective. Indeed, a state analysis of the financial transactions carried out by major companies and SMEs allows for identifying the possible frauds and money laundering.
Therefore, the choice between the policy that allows corporations carry out their accounting without the audits from the state officials and the policy that presupposes close supervision of the major corporate accounting processes depends on the number of costs taken in either of the scenarios. Hence, it can be suggested that the state supervision of corporate accounting seems quite a legitimate procedure and that SEC should be reinforced. Hence, I agree with the fact that the existing system of accounting practice regulation does require a thorough renewal. However, I do not think that, by getting rid of the one, the state will be able to handle the number of financial frauds that a range of unscrupulous companies are most likely to resort to in the event of the cessation of accounting supervision.