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Understanding participation in accounting standard‐setting: the case of AASB ED 192 Revised Differential Reporting Framework
Author(s) -
Handley Karen,
Evans Elaine,
Wright Sue
Publication year - 2020
Publication title -
accounting and finance
Language(s) - English
Resource type - Journals
SCImago Journal Rank - 0.645
H-Index - 49
eISSN - 1467-629X
pISSN - 0810-5391
DOI - 10.1111/acfi.12490
Subject(s) - accounting , premise , financial accounting , accounting standard , financial statement , business , process (computing) , public relations , political science , accounting information system , audit , computer science , linguistics , philosophy , operating system
Abstract This paper explores the motives of participants in the standard‐setting process, based on the premise that standard‐setters strive for standards that are useful for decision‐making by a wide range of financial statement users. Our setting is the development of a contentious but contained Australian accounting standard, Reduced Disclosure Requirements . A consultative process initiated by the Australian Accounting Standards Board to create a specific Australian accounting standard for differential reporting provided an opportunity for interested parties to participate. We analyse the motives of participants through semi‐structured interviews with members of the Australian Accounting Standards Board and comment letter writers who responded to the relevant exposure draft. Our findings identify participants’ economic and political motivations and question the ability of the current standard‐setting process to extract decision‐making requirements from a wide range of users of financial statements and to reflect these in financial reporting standards. We find that the perspectives gathered are homogenised and that the process privileges the voices of powerful elites.