Calls for action to prevent a repeat of the global financial crisis have touched upon accounting standard-setting and the way in which accounting information (or lack thereof) contributed to the global financial crisis.

Requirement:

Drawing on relevant academic literature, discuss:

(a) whether financial reporting, particularly with respect to fair values, in contrast to accounting regulation, contributed to the Global Financial Crisis;

(b) the usefulness of the information standard-setters require companies to provide to enable the capital markets to assess the financial position of a company; and

(c) suggestions for potential changes in financial reporting to improve the transparency of information provided to the capital markets.