Regulatory and Political Influence on Accounting Practices
egulatory and Political Influence on Accounting Practice
Learning Objectives
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Critically discuss the regulatory environme concerning Australian external financ reporting. Describe the main regulatory bodies th encompass the Australian reporti environment. Review some of the arguments proposed f and against regulation of the accounti profession. Outline the relevance of potential econom political and social impacts to the account
Introduction
Financial Accounting
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A process involving the collection and processing of financial information to meet the decision-making needs of parties external to an organisation.
The information rights of outsiders, who are not involved in the day-to-day operations of the organisation, must be protected.
How?
What is Regulation?
• Definition:
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The Oxford Dictionary defines regulation in terms of a prescribed rule or authoritative direction
The Macquarie Dictionary defines regulation as a rule of order, as for conduct, prescribed by authority; a governing direction or law
• On
the basis of these definitions we can say that regulation is designed to control or govern conduct
• Hence
regulations relate to the rules that have been developed by an independent authoritative body that has been given the power to govern how we prepare financial statements, and the actions of the authoritative body will
Regulators
Change in the development of accounting standards and regulation wi enhanced emphasis being placed on government rather than accou profession — reducing ability of accounting profession to ‘self-regulate’.
There are four main bodies that create and/or enforce accounting regulat
Australia
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The Australian Securities and Investments Commission (ASIC)
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The Australian Accounting Standards Board (AASB)
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The Financial Reporting Council (FRC)
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The Australian Securities Exchange (ASX)
Learning Objectives
!
!
!
!
Critically discuss the regulatory environme concerning Australian external financ reporting. Describe the main regulatory bodies th encompass the Australian reporti environment. Review some of the arguments proposed f and against regulation of the accounti profession. Outline the relevance of potential econom political and social impacts to the account
Introduction
Financial Accounting
!
!
!
A process involving the collection and processing of financial information to meet the decision-making needs of parties external to an organisation.
The information rights of outsiders, who are not involved in the day-to-day operations of the organisation, must be protected.
How?
What is Regulation?
• Definition:
•
•
The Oxford Dictionary defines regulation in terms of a prescribed rule or authoritative direction
The Macquarie Dictionary defines regulation as a rule of order, as for conduct, prescribed by authority; a governing direction or law
• On
the basis of these definitions we can say that regulation is designed to control or govern conduct
• Hence
regulations relate to the rules that have been developed by an independent authoritative body that has been given the power to govern how we prepare financial statements, and the actions of the authoritative body will
Regulators
Change in the development of accounting standards and regulation wi enhanced emphasis being placed on government rather than accou profession — reducing ability of accounting profession to ‘self-regulate’.
There are four main bodies that create and/or enforce accounting regulat
Australia
!
The Australian Securities and Investments Commission (ASIC)
!
The Australian Accounting Standards Board (AASB)
!
The Financial Reporting Council (FRC)
!
The Australian Securities Exchange (ASX)
References: ! ! Deegan (2009) Financial Accounting Theory (3ed), McGraw Hill Ltd: Australia. Deegan (2009) Australian Financial Accounting (6ed), McGraw Hill Ltd: Australia.