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In: Accounting

Research, define, describe, and explain the above-mentioned (Minimum 250 words answer for each questions) Describe and...

Research, define, describe, and explain the above-mentioned (Minimum 250 words answer for each questions)

Describe and explain the regulatory environment.

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Expert Solution

The regulatory environment is the environment available to an enterprise Which is required to follow certain rules and regulations set up by regulatory bodies and other government agencies and establishments whose sole purpose is to make sure that rights of all the stakeholders are protected and enterprises take in consideration the needs and expectations of all the stakeholders while performing their duties to achieve what they set out to achieve.

The regulatory environment is created by the government agencies and establishments by introducing checks on the working of the enterprise i.e. periodical reporting of the affairs of an enterprise is an example of regulated environment which is mandatory for an enterprise to adhere with and the ignorance of which may result in decreased trustworthiness of such enterprise. Regulations states which conditions must be met by the enterprise to produce valid results or products of a satisfactory level of quality.

Since the compliance of some of the regulations set by the government agencies are mandatory in nature and also attract huge penalties and negative impact on the image of an enterprise when not followed hence it is mandatory for an enterprise to develop a committee of knowledgeable members who are given the responsibility of making sure that an enterprise is complying with all the regulations applicable on it. Also, periodical audits by an independent auditor should be conducted to evaluate the effectiveness and efficiency of the committee made and whether they are doing justice to their respective positions.


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