Regulation of financial reporting

Generally accepted accounting principles
Financial reporting is regulated and controlled. Regulations help to ensure that information reported in financial statements has the required qualities and
content.
The concepts, principles, conventions, laws, rules and regulations that are used to prepare and present financial statements are known as Generally Accepted Accounting Principles or GAAP.
The main sources of GAAP in a jurisdiction are:
 Company Law; and
 Accounting standards
GAAP varies from country to country, because each country has its own legal and regulatory system. For example, there is Pakistan GAAP, US GAAP etc.

Accounting standards

The accountancy profession has developed a large number of regulations and codes of practice that professional accountants are required to use when preparing financial statements. These regulations are accounting standards.
Accounting standards are applied by companies rather than sole traders and partnerships though they are written for all entities. Many countries and companies whose shares are traded on the world’s stock markets have adopted International Financial Reporting Standards or IFRS. These are issued by the International Accounting Standards Board (IASB).