COVER PAGE

A. Discuss what influence politics has on the establishment of accounting standards. [10
marks]

Accounting standards are created through complicated interactions with different stakeholders,
including standard-setting bodies, professional organizations, governments, and private
organizations. The fundamental objective of these standards is to upgrade transparency,
consistency, and comparability in financial reporting, but the most common way of creating
them is regularly influenced by political contemplations (Abdulrahimov, 2024). Now, we will
investigate the elements of the International Accounting Standards Board (IASB), the Financial
Accounting Standards Board (FASB), and the Australian Accounting Standards Board (AASB)
to perceive how these policies affect the establishment of accounting standards.

The International Accounting Standards Board (IASB)

The IASB is an independent, private-sector body that creates and gives International Financial
Reporting Standards (IFRS). These standards are utilized in more than 140 jurisdictions all over
the world, including the European Association and numerous different nations. While the IASB
intends to lay out excellent, universally acknowledged accounting standards, the method
involved with setting these standards isn't immune to political impacts (Saw, 2013).

The IASB's essential role is to make and issue IFRS, which are expected to improve
transparency, comparability, and top-notch monetary reporting all over the world. Before
concluding and publishing new or changed standards, the IASB goes through a thorough fair
treatment that incorporates critical review, public consultations, and stakeholder conversations.
In addition to giving IFRS, the IASB furnishes understanding and direction to help with the
steady utilization of these guidelines. The IFRS Interpretation Committee (IFRIC) is responsible
for analyzing the utilization of IFRS and giving definitive direction on arising monetary
announcing issues (Carter & Warren, 2018).

The IASB teams up effectively with national rule-setters, for example, the Financial Accounting
Standards Board (FASB) in the US, to support accounting standard unions and normalization all
over the world. This coordinated effort expects to diminish disparities in monetary reporting
strategies and increment cross-jurisdictional equivalence. The IASB's standards and direction act
as a source of perspective points for national and regional standard-setters, even in a jurisdiction

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that has not completely adopted IFRS. These standard-setters frequently think about IFRS while
creating or revising their accounting guidelines, prompting a continuous combination towards
worldwide accounting activities.

The Financial Accounting Standards Board (FASB)

The FASB is the significant standard-setter for Generally Accepted Accounting Principles
(GAAP) in the US. While the FASB is an independent private-area association, its activities are
impacted by various administrative elements, including the Securities and Exchange
Commission (SEC), Congress, and industry affiliations (Santos et al., 2021).

The FASB utilizes a severe due treatment to create and issue accounting rules, known as the
FASB Accounting Standards Codification (ASC). This interaction involves critical review,
public meetings, and conversations with a large number of stakeholders, including budget
summary preparers, auditing firms, regulators, and end clients. This thorough cycle permits the
FASB to propose new accounting norms update existing ones to address arising difficulties or
upgrade monetary reporting activities.

The FASB's Agenda advisory council gives input on the Board's specialized plan and
undertaking needs. This chamber includes agents from different stakeholder groups, permitting
assorted viewpoints to impact the FASB's plan and the issues it addresses to through standard-
setting practices. The FASB teams up often with administrative specialists, for example, the
Securities and Exchange Commission (SEC), to ensure that rules are steady with administrative
necessities and advance receptiveness and financial investors (Young, 2014). The SEC can
perceive and implement the FASB's accounting standards for public firms, giving them
legitimate weight.

The Australian Accounting Standard Board (AASB)

The Australian Accounting Standards Board (AASB) is an autonomous standard-setting body

that creates and gives Australian accounting standards. While the AASB works inside a structure
made by the Australian government, it is dependent upon political pressure from different
sources, including government divisions, industry groups, and professional associations.

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The AASB cautiously monitors the improvement of International Financial Reporting Standards
(IFRS) delivered by the International Accounting Standards Board (IASB). The AASB has a
strategy of taking on IFRS for Australian firms, with incidental corrections to meet Australian-
explicit issues or administrative prerequisites (Howieson, 2017). By embracing and integrating
IFRS into Australian bookkeeping guidelines, the AASB guarantees that nearby setting is
considered while staying lined up with worldwide prescribed procedures.

The AASB's accounting standards are enforceable under Australian company regulations and
other pertinent regulations. This legitimate backing guarantees that substances in Australia
consent to the bookkeeping principles set by the AASB, further supporting their impact on
monetary detailing activities.

In conclusion, establishing accounting standards is a complex cycle including various groups and
impacted by legislative issues. The IASB, FASB, and AASB are the vital experts responsible for
creating and issuing accounting principles overall and inside their particular nations. While these
standard-setting bodies endeavour to keep up with autonomy and objectivity, they are impacted
by political variables from different sources. National legislatures, administrative bodies,
industry groups, and expert associations apply pressure on these boards through financing
instruments, authoritative changes, campaigning endeavours, and public discussions.

B. Examine whether political factors have played a role in the development of accounting
standards in Australia, and comment on whether you agree or disagree with the Australian
Government's involvement in the standard-setting process. [10 marks]

Bookkeeping principles in Australia have been impacted by different policy-driven issues that
show the country's general financial and administrative climate. Analyzing the verifiable setting
and progressing join between political factors and accounting standard-setting reveals insight
into the idea of this impact.

Economic Policy Objectives: Political factors frequently interact with economic approach
targets, forming the improvement of accounting guidelines to line up with public monetary needs
(Lassou et al., 2014). For example, during times of monetary change or emergency, the
Australian government might look for accounting norms that advance monetary steadiness,

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transparency, and financial investors. The push for thorough monetary reporting guidelines can
be a reaction to political objectives to reinforce the strength of the monetary framework.

Regulatory Oversight and Public Trust: Keeping up with public confidence in monetary business
sectors and administrative associations is a vital factor in the improvement of accounting
principles. In the repercussions of business outrages or monetary emergencies, the public
authority might underscore the significance of solid bookkeeping guidelines to reestablish trust
(Nagy et al., 2023). Stricter limitations, impacted by political will, can influence the substance
and implementation of accounting guidelines.

Government Association in Oversight and Support: The Australian government's dynamic

contribution in directing the AASB brings political impact into the standard-setting process. The
public authority designates individuals to the AASB and offers monetary help, building up its
part in moulding the plan and needs of the board. The support of accounting principles by
government bodies further highlights the political aspect, as it connotes the arrangement of
guidelines with public approach goals.

Answer to Social and Environmental Worries: Tending to social and environmental worries
requires considering political variables. As public awareness and political conversation of
ecological and well-disposed issues develop, there is a more prominent accentuation on
accounting standards that incorporate viability point by point (Armitage et al., 2012). To address
these difficulties, the public authority might impact the AASB to settle on choices that consider a
more extensive scope of social, ecological, and monetary contemplations.

Worldwide Harmonization and Worldwide Relations: Australia's relationship with the overall
economy and financial business areas conveys political components to the standard-setting
process. The government's commitment to change Australian accounting standards to in general
standards spread out by the IASB reflects political decisions highlighted by growing overall
earnestness, enabling new pursuits, and ensuring similitude with trading accessories.

Evaluation of Government Involvement

Guaranteeing Public Economics Targets: Government inclusion can guarantee that accounting
principles line up with more extensive public monetary targets (Chima, 2022). By effectively

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partaking in the standard-setting process, the public authority can add to the advancement of
principles that help monetary development, monetary strength, and financial investors.

Upgrading Validity and Worldwide Arrangement: Government support further develops

believability and worldwide arrangement for bookkeeping guidelines, both locally and
internationally. The Australian government's arrangement with worldwide IASB principles
exhibits its obligation to an orchestrated and reliable monetary revealing structure. This, thus,
builds the believability of Australian ventures in the overall economy.

Public Responsibility and Transparency: Government contribution can improve public

responsibility in the standard-setting process (Mabillard & Zumofen, 2021). The popularity-
based nature of government guarantees that choices connected with accounting principles are
dependent upon examination and transparency, encouraging public confidence in the
administrative system.

Adjusting Adaptability and Dependability: Finding some kind of harmony between government
inclusion and the freedom of the AASB is urgent. While government oversight guarantees
steadiness and consistency, it is fundamental to permit the AASB the adaptability to answer
advancing accounting activities, arising issues, and worldwide improvements without
unnecessary political obstruction.

Mitigating Industry Bias and Guaranteeing Public Interest: Oversight by the public authority can
lessen predispositions brought about by industry campaigning and safeguard the public interest.
The public authority, as a neutral party addressing the public interest, can go about as aware of
industry requests by guaranteeing that accounting rules focus on transparency, responsibility, and
the interests of various partners (Baudot, 2013).

In my opinion, political forces have affected the advancement of Australian accounting rules.
While government commitment is basic for coordinating guidelines with monetary objectives
and encouraging public trust, a fine balance is required. Unnecessary political impact
compromises the AASB autonomy and specialized discipline. Finding some kind of harmony
that keeps up with the AASB's freedom while drawing in different sentiments is basic for a solid
and responsive standard-setting process that benefits both the economy and the general

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population. The government, the AASB, and different accomplices ought to cooperate to make a
transparent, responsible, and proactive standard-setting process that helps the Australian
economy and its numerous partners over the long term.

References
Abdulrahimov, T. (2024). ADOPTION OF IFRS IN THE EUROPEAN UNION.

Armitage, D., Loë, R., & Plummer, R. (2012). Environmental governance and its implications
for conservation practice. Conservation Letters, 5. https://doi.org/10.1111/j.1755-
263X.2012.00238.x

Baudot, L. (2013). 1. Perspectives on the role of and need for accounting regulation. In The
Routledge Companion to Accounting, Reporting and Regulation (pp. 207–227).

Carter, D., & Warren, R. (2018). Metonyms and metaphor: the rhetorical redescription of public
interest for the International Accounting Standards Board. Critical Policy Studies, 13, 1–26.
https://doi.org/10.1080/19460171.2018.1437460

Chima, C. (2022). 21 ST CENTURY PUBLIC SECTOR ACCOUNTING FRAMEWORK:

REBUILDING THIRD WORLD NATIONS FOR PUBLIC SECTOR MANAGEMENT. 7.

Howieson, B. (2017). The Phoenix Rises: The Australian Accounting Standards Board and IFRS
Adoption. Journal of International Accounting Research, 16. https://doi.org/10.2308/jiar-
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Lassou, P., Hopper, T., & Tsamenyi, M. (2014). Political economy of accounting and
governance in Africa.

Mabillard, V., & Zumofen, R. (2021). Transparency and Accountability—The Case of Public
Procurement Practices in Switzerland. Public Works Management & Policy, 26, 95–114.
https://doi.org/10.1177/1087724X19898699

Nagy, S., Pelser, A.-M., & Vaiman, V. (2023). The improvement of Skills & Talents in the
workplace.

Santos, M., Alexandre, P., Heliodoro, P., & Dias, R. (2021). International Accounting Standards
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 Literature Related to the COVID-19 Pandemic.

Saw, D. (2013). International Accounting Standards Board. In Encyclopedia of Corporate Social

Responsibility (pp. 1492–1494). https://doi.org/10.1007/978-3-642-28036-8_618

Young, J. (2014). Separating the Political and Technical: Accounting Standard-Setting and
Purification. Contemporary Accounting Research, 31. https://doi.org/10.1111/1911-
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