Regulatory compliance and corporate governance play a crucial role in preventing financial misstatements, ensuring transparency, and maintaining investor confidence. This paper explores the interplay between corporate governance mechanisms and regulatory frameworks in mitigating financial misstatements, fraud, and unethical financial reporting. It examines key governance structures, including board oversight, audit committees, and internal controls, in enforcing compliance with financial regulations such as the Sarbanes-Oxley Act (SOX) and International Financial Reporting Standards (IFRS). The study highlights the significance of ethical leadership, risk management, and external audits in strengthening financial accountability. Furthermore, it discusses how regulatory bodies and enforcement agencies deter corporate misconduct through penalties and legal repercussions. By analyzing case studies of financial misstatements, this paper underscores best practices for corporate governance to enhance compliance and safeguard financial integrity. The findings suggest that a robust governance framework, aligned with evolving regulatory requirements, is essential for preventing financial misreporting and fostering corporate sustainability.