Is accounting standard setting a political process?

Is accounting standard setting a political process?

Q1-8 ANSWER: Yes, the promulgation of financial accounting standards is a political process. There are several groups that influence the standard setting process. Nonetheless, the SEC can exert pressure on the FASB to issue accounting standards and veto the standards promulgated by the FASB.

How accounting standards are enforced in Australia?

The Australian Accounting Standards Board (AASB) is the Australian Government agency responsible for developing, issuing and maintaining accounting standards that apply under Australian company law. The Board’s functions and powers are set out in the Australian Securities and Investments Commission Act 2001.

What accounting standards does Australia follow?

By adopting International Financial Reporting Standards (IFRS ® Standards), Australia is delivering more transparent financial information for shareholders and regulators. Australian accounting standards are based on IFRS Standards.

What is lobbying in accounting?

Lobbying on accounting issues has been defined as a collective term for the actions taken by interested parties to influence the rule-making body (Sutton, 1984).

What is the accounting standard setting?

An accounting standard is a set of practices and policies used to systematize bookkeeping and other accounting functions across firms and over time. Accounting standards apply to the full breadth of an entity’s financial picture, including assets, liabilities, revenue, expenses, and shareholders’ equity.

How do financial accounting standards are the outcome of a political process?

The meaning of the statement that financial accounting standards are the outcomes of a political process because governmental factors influence the accounting standards. This process is political because the government, through the Security and Exchange Commission, impacts the accounting standards.

What are standard setting processes?

It explains how the FASB gathers information about potential costs and benefits of standards, as well as how the cost-benefit analysis differs from an analysis of economic consequences. The Board deliberates at one or more public meetings the various reporting issues identified and analyzed by the staff.

Is Standards Australia a government agency?

Standards Australia is the nation’s peak non-government, not-for-profit standards organisation.

What are Australian standards and standards?

Standards are voluntary documents which are developed by consensus. While Australian Standards are not legal documents, many are adopted into Commonwealth, state or territory legislation and become mandatory. Standards are also often incorporated into legal contracts.

What is accounting standards setting?

What is political lobbying on accounting standards?

From the agency theory view, lobbying in accounting standards setting takes place when the conflict of interest between the society and the standard setters or companies is observed.