In the modern society, the competition in the global market is becoming more and more severe. As a result, it has been shown that the regulation of accounting information is becoming more and more important for the modern corporations. Social, economic and political factors are close to the development of regulation of accounting. And more importantly, there are differences among different countries for the different international regulatory frameworks. It has been stated by professionals that ‘information is the oil that lubricates markets’. The purpose and aim of the regulation of accounting information is to identify different needs for companies in the market have different perspectives. In order to answer the question ‘information is the oil that lubricates markets. How can this statement be used to justify the regulation of accounting information?’ This essay will includes the following sections: background of accounting regulation in Malaysia, definition of regulation of accounting information, needs of regulation of accounting information, boundaries of regulation of accounting information, aim and purpose of accounting information.
2.0 Background of accounting regulation in Malaysia
It has been shown from evidence that Malaysia has adopted IAS in 1978. Also, the MIA and MICPA collaborate together in order to produce MAS. And in 1997, FRA in Malaysia has established FRF & MASB and the Financial Reporting Act 1997 has been established as a trustee body as well. In 1998, the function of accounting standards setting in Malaysia was taken over by MASB. Also, in Malaysia, the ROC (Register of Companies) is governing the financial accounting and reporting standards.
3.0 Definition of regulation of accounting information
It has been stated that the theory of accounting information argues that whether companies have to be forces to disclose information about their performance and operations to the users and other interested parties in the market. Or on the other hand, they should voluntarily disclose their accounting information without regulation of accounting information. From my perspective, the regulation of accounting information is necessary for the statement that ‘information is the oil that lubricates markets’ (Abbott, A., 1998).