Government oversight of corporate finances is important and needed in the public and private corporate companies. It helps in the fight against financial fraud, corruption, and bankruptcy. It also helps to ensure accurate data and record keeping to corporate companies and businesses. It is a way where government supervises and sets up legal measures to those violating financial rules and regulations. It is also a way where the government restores financial flow and stability in the economy for the country's economic stability.
Government oversight of corporate finances is important and needed in the fight against financial waste, fraud and corruption in corporate businesses and firms. In fighting financial waste and fraud, companies are required to have annual reviews and reports on their financial statements, balance sheets, and income statements. This can help to access and see how well corporate businesses utilize their finances. It can also be used as a tool to over come deficits and companies from running bankrupt.
With respect to fighting fraud and corruption, government plays an essential roll by supervising and controlling finances of public and private corporate businesses. This discourages shady accounting practices and poor record keeping of corporate firms, thus ensuring accurate and appropriate data keeping. Government also sets up preventive measures and has authority to enforce law and bring legal action against those who have committed fraud and corruption, like in the case of Enron's collapse.
Government oversight of corporate finances can also help to restore financial flow and stability of the nation. This assures confidence in the nation's capital and stock markets thus promoting the investment level and restoring the economy. It also helps government in its decision of allocating resources, and answers their questions of where and how to inject more money and finances.
