Financial accounting is the practice of recording financial transactions. This practice has become essential to best business practice procedure and has been the backbone to the possibility of being able to trade stock derivatives in the financial markets. Financial accounting was also necessary for the implementation of the stock exchange whereby each company had price tag for its sold share on the market for wide exchange and liquidity. It has made transparency in the trading and
exchange of shares from investor to investor. Although some financial accounting mis-haps occur, it has minimized many a great risks.
On the other hand, most countries have also implemented accounting regulations that go hand in hand with business transparency, also
considering the fact that the government has to collect monthly taxes. Transparency is necessary when it comes to collecting taxes as well. It would be ditrimental if there was no such thing as accounting, if transactional transparencies were neglected then paying taxes and exchanging shares would be nearly impossible to realize. Most would have practiced tax aversion and financial price arbitrage.
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