The paper 'Accounting Standard Setting' is a great example of a Finance and Accounting Case Study. The main obstacle in the Accounting Standard setting path is a set of political influence that may be elicited by any board plan to lay down precise accounting treatments, get rid of alternative treatments, enforce supplementary disclosure necessities, or tighten the permitted interpretations. "Political" lobbying means self-interested considerations by preparers and others that can be disadvantageous to the interests of investors and other users, an incident that has been associated with the term "economic consequences” (Financial Economists Roundtable 2002). Accounting standard-setting process in Australia The first process involves a technical matter being identified by an international organization, e.g.
International Accounting Standards Board (IASB) or the International Financial Reporting Interpretations Committee (IFRIC). Australia has implemented International Financial Reporting Standards (IFRSs) from 2005, aligned with planned direction from the Financial Reporting Council. Consequently, matters regarding the IASB work program and the IFRIC work program are also incorporated on the AASB work program, even though the level of participation by the AASB varies matter-by-matter and can be substantive or non-substantive.
A technical matter can also be recognized by the International Public Sector Accounting Board (IPSASB). The AASB directly supervises the IPSASB work plan and takes on work on chosen topics, the base being their importance to public sector financial reporting in Australia (Jacobs 2002). (Jesse 2006) The second process involves the AASB identifying technical matters needing any consideration. Matters identified in regard to profit bodies are the IASB or the IFRIC for consideration. The matters that affect non-profit bodies, either public or private sectors are tackled domestically or passed on to the IPSASB. After the identification of the subject matter, the AASB develops a project proposal.
The project proposal has an evaluation of possible benefits of carrying out the project, the involved expenses, the available resources, and possible timing. The AASB then evaluates the proposal and decides if the project is worth and should be incorporated in its work program. If the board opts not to add the issue to its program, the Board can opt to officially report the verdict as a Board Agenda Decision. The verdict is recorded and an official Agenda Decision is given out.
After the subject matter has been incorporated into the agenda, AASB discusses program papers. The program papers tackle a number of issues, possible advances, and timing outputs. After completion of the research, the AASB develops connected documents for any comments from the public and dialogue with stakeholders through documents like: Exposure Draft-This document contains the proposed standard and contains polished proposals when compared to Invitations to Comment, Discussion Papers, and Consultation Papers. An Invitation to Comment-The The purpose of this document is to seek feedback on wide proposals and may have a discussion paper or discussion paper. Draft Interpretations- This document contains all proposed interpretations. Discussion Paper- It summarizes a broad range of potential accounting plans on a certain topic.
Discussion papers, consultation papers, and comparable documents can be given by the AASB, the IASB, or other typical setters. The AASB can decide to give international documents in Australia for remark, possibly with an Australian preamble added to clarify the framework (Peter 2003).
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