Financial regulation, hwever, i not entirely dependent on financial statements because financial regulation can cover all of the economy while financial statements from accounting cover only the economic conditions of specific firms or group of firms under a conglomerate (Borio and Tsatsaronis 2005; H Treasury 2010). Fr example, fnancial regulators would also be monitoring liquidity, iterest rates, cpital flows, ad other macroeconomic variables, nt merely financial statements. Manwhile, aother type of regulation also uses financial statements but is different from financial regulation: srengthening corporate governance. Aademic research contributed sciences or fields of accounting, fnancial regulation, ad corporate governance.
I the process, aademic research protected and advanced modern living and, tus, i can be said that academic research improved our lives. Athough not all journal articles are academic research, Ireview a few accounting journals to illustrate how academic research has been developing the field of accounting and, rlatedly, fnancial regulation. I so doing, Iwill attempt to illustrate how academic research contributes to making life more bearable and addressing life itself (Humphrey and Lee 2004; Serling 1975). Brth (2010) examined how financial reporting contributed to the financial crisis.
Tey concluded that fair value accounting played little or no role in the financial crisis (Barth and Landsman 2010). Ufortunately, hwever, te lack of transparency in securitization and derivatives misled investors from assessing properly property values and the riskiness of bank assets and liabilities (Barth and Landsman 2010). Bcause of this, Brth and Landsman (2010) proposed to require banks to “recognize whatever assets and liabilities they have after the securitization” to reflect better the “underlying economics” of banks. tey “disclosure of more disaggregated information, dsclosure of the sensitivity of derivative fair values to changes in market risk variables, ad implementing a risk-equivalence” to enable investors to understand better the leverage inherent in derivatives” (Barth and Landsman 2010).
Fture research may or may not confirm the validity of the Barth and Landsman perspective but the important point is that they have forwarded a point of view that promotes research inquiry so their recommendations can. ..
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