Legislative Development in the Accounting and Auditing Area, with an Overview to the Law on Amendments to the Law on Accounting and Auditing

Market economy functioning depends, inter alia, on a strong financial system and financial reporting system quality. Such system is crucial aspect of business environment in reference to the availability of timely and reliable information to investors, regulators and other stakeholders.

Accounting of all entities is being regulated by the Law or standard of the accounting profession. Accounting regulation is a term often used in the accounting literature and practice, rooted in the Latin word that means the regulatory rules, regulations, principles and standards for bookkeeping, preparing of financial statements, assessing and, in general, accounting regulation. Accounting legislation has narrower meaning of regulation, and applies only to legislation passed by the Parliament. Defining and development of accounting regulation can be viewed as a process at the national or supranational (international) level. Accounting regulation can be defined on the supranational or international level using one of two approaches: a) laws (e.g., Law on Accounting or Companies Law, or Commercial law), regulations, similar legislation (e.g., Directives and b) the principles or standards of the accounting profession (national or international accounting standards). Content of accounting regulations, therefore, constitute of legislation (laws, decrees, decisions, regulations or directives) and/or accounting standards (U.S. GAAP U.S. and the International Accounting Standards).

At the national level, the accounting may be regulated by applying one of the following models...