Discuss the view that increased regulation will not necessarily lead Essay - 1

Discuss the view that increased regulation will not necessarily lead to higher ethical standards - Essay Example t would have been so then companies to maintain the conduct of its employees ethically sound would have been competing on number of regulations than their effectiveness. Hence, this paper is aimed to support the view that increased regulation does not necessarily increase the ethical standards. On developing the general argument, this paper will also attempt to develop support from variation in accounting and auditing treatments with level of compliance to financial regulation and ethical standard. In the end, it would suggest ways to increase ethical standard of firms and especially accounting and auditing professionals. Concerns regarding the ethical conduct of the business have gained increased attention since recent past. Accurate to state would be to mention the point in time when corporate scandals mainly Enron scandal unveiled and resulted in huge fines, reputational loss and even sentenced to jail (BBC News, 2002). It proved to be the earthquake in trust of stakeholders on the validity of information presented by firms and increased cynicism about the accounting practices worldwide (Enderle, 2004). This shake accounted the top management of the firm for the fraudulent act mainly and the question to be posed to entire mechanism that remained in-capable to indentify the deceiving accounting practices were given least or no punishments (Enderle, 2004). In the mentioned case, it was desirable to correct the existing regulation with focus to eliminate the flaws. This exercise presumably was expected to have more constructive results. The role of auditors in particular became a question mark after this scandal. Moreover on adoption of the corrective measures, the impact of current financial crises was also expected to have been mitigated to some extent; if couldn’t be eliminated in full (Argandona, 2012).Contrary to this and without taking lessons from Enron case, increased regulations were imposed on businesses. Increased regulation provided more options to