Standard Setting in Political Environment

2381 Words Mar 20th, 2013 10 Pages
Introduction
Accounting standards dominate the accountant’s work. These standards are being constantly changed, deleted, and/or added to, both in the United States and abroad. They provide practical and handy rules for the conduct of the accountant’s work. They are generally accepted as firm rules, backed by sanctions for nonconformity. Accounting standards usually consist of three parts: * A description of the problem to be tackled * A reasoned discussion (possibly exploring fundamental theory) or ways of solving the problem * In line with decision or theory, the prescribed solution
In general, standards, especially auditing standards, have been restricted to the prescribed solution, which has generated a lot of controversy
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The Financial Reporting Act 1997 was gazette on 6 March, 1997. The FRF is established under the Financial Reporting Act 1997 (Act). The FRF comprises representation from all relevant parties in the standard setting process, including preparers, users, regulators and accountancy profession. The FRF, as a trustee body, has responsibility for the oversight of the MASB’s performance, financial and funding arrangements, and as an initial source of views for the MASB on proposed standards and pronouncements. It has no direct responsibility with regard to standard setting. This responsibility rests exclusively with the MASB. The aims of the MASB are to implement an efficient, effective structure and ‘due processes’ for the development of MASB Standards, a conceptual framework and other forms of authoritative guidance.
Other than that, MASB also aim to pursue the development of MASB Standards, a conceptual framework and other authoritative guidance on a basis that recognizes that users of financial statements are the primary customer, so that those users are better able to make economic decisions. The MASB established a committee in May, 2002 known as the Issues Committee to replace its predecessor, Interpretation Committee. The change in name reflects the expanded scope of the committee which, in addition to dealing with interpretations
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