2) .The standard setting proces is highly political.

Describe an accounting
regulation that would be politically controversial, and the types of political
pressures that could be brought to bear in the standard setting process

3) The text describes a theory of regulatory capture.

(a) What is regulatory capture?
(b) How can standard setting bodies such as the AASB avoid regulatory
capture?
(c) If a standard setting body is 'captured' by the profession, are there any
steps that the government can take to make the body independent? If so,
should the government take those steps? Justify your answer.
(d) Do you believe that the current international accounting standard setting
arrangements, based around the IASB, are at risk of regulatory capture? Why
or why not?

5) If the IASB concludes that the economic consequences of a standard it is

about to approve will disadvantage a powerful lobby group, what should the
IASB do about the situation?
6) How do you think accounting standards should be set? Is that the
approach currently taken by the IASB?
8) What are free riders? How can a system ensure that those who benefit
most from an accounting standard requiring certain disclosures also bear the
greatest costs of it?
12) Each of the three theories of regulation discussed in this chapter has its
stregths and limitations in describing accounting standard setting, either
past or present. What do you believe are those strengths and weaknesses?
Provide an example where you believe each of the theories has applied , or is
likely to apply.
15) The IASB and FASB began a convergence project in 2002.
a. What are the expected benefits of the convergence project?

b. What factors make convergence difficult?

c. How is the future of the IASB tied to convergence?