Essay The Political Nature of Accounting Standard Setting

2004 Words Jul 2nd, 2011 9 Pages
The political process of the adoption of IAS’s and harmonising these standards with the AAS’s has had far reaching impacts. This may be due to the influences of the government, boards, corporations and regulatory bodies involved in dominating the process, which can be seen through a brief look at the history of the actions taken by each of these parties to change the accounting world. There are visible benefits to the parties who influenced the changes in both economical and social ways. Along with benefits for some parties comes disadvantages to those who lost their influential power. The make up of the Boards gives rise to questions as to what the goals of the boards are both in the near future as well as in the long run. The timeliness …show more content…
So through the establishment and dissolution of various bodies and committees, “submissions of exposure drafts... lobbying”, and legislative bills, the eventual result was the adoption of the IASB’s standards in 2005 (Tutticci, Dunstan & Holmes 1994 pp. 86). This whole process proved to be political in that the government wanted to retained its power and saw this field as an opportunity to do this. The Treasury readily took on the responsibility, the ASX’s relationship with the Liberal Party enabled it to wield great influence and thus push out competing exchanges. The large companies had influence through the ASX and other groups lobbied for their position in this arena.
Admittedly, there are non-political influences that have a role in the factors for adopting IAS’s such as globalization. Yes, this has been put into the non-political box because although it can be viewed as political, globalization is also an evolution of international trade with the assistance of technological advancement. What is meant by this is that once upon a time there were small businesses doing local business with locals. As the internet came about and there were improvements in electronic technology, businesses began to trade on an international level. This also influenced political processes in that there was something to be gained from embracing this inevitable
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