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The regulatory impact of the Australian Accounting Standards Board
Office of Regulation Review submission
This submission to the Treasury was released in May 1997. The submission, on the Corporate Law Economic Reform Program, qualitatively examines the incidence and impact of accounting standards, made under the Corporations Act 1989.
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- Contents
Preliminaries
Cover, Contents, Executive Summary
1 Introduction
2 Role and impact of the AASB
3 Benefits, costs and alternatives to accounting standards
3.1 Benefits of accounting standards
3.1.1 Direct benefits of accounting standards
3.1.2 Indirect benefits of accounting standards
3.2 Costs of accounting standards
3.2.1 Direct costs of accounting standards
3.2.2 Indirect costs of accounting standards
3.3 Issues of “regulatory capture”
3.4 Market alternatives
3.4.1 Competition in capital markets
3.4.2 Signalling
3.4.3 Contractual incentives
3.4.4 Market discipline theories appear inadequate
4 The impact of the Legislative Instruments Bill 1996 upon accounting standards
4.1 Existing mechanisms for the development of accounting standards
4.2 Legislative Instruments Bill 1996 and the promulgation of accounting standards
4.2.1 A summary of the proposal for the legislative instrument
4.2.2 An analysis of other means of achieving the objective
4.2.3 A broad indication of the relative costs and benefits of the proposal
4.2.4 An evaluation of whether the option restricts competition, whether the restriction is necessary
to achieve the objective, and if other options achieve the objective without restricting competition
4.2.5 A statement of the reasons for the preferred approach
4.2.6 Consultation
4.3 Sunsetting arrangements for all legislative instruments including accounting standards
5 Conclusion
Appendix 1 Powers of the AASB
Appendix 2 Activities of AASB
2.1 Development and issue of pronouncements
2.2 Monitoring and maintenance of existing standards
2.3 Application to the Australian Securities Commission for relief
2.4 Seminars
2.5 Liaisons with constituents
2.6 Involvement with other accounting standard setting bodies
Appendix 3 Mooted reforms
3.1 Expediting procedures for tackling non-compliance
3.2 Proposal to merge the AASB with the PSASB
3.3 Specific standards for life insurers
3.4 Exemptions applicable to banks and life insurers will operate through ASC Class Orders
3.5 Removal of accounting requirements from the Corporations Law
3.6 International harmonisation
Appendix 4 Other requirements (if not elsewhere covered in the RIS)
Consultation
Administrative simplicity, economy and flexibility
Explanatory material
Appendix 5 Review
Appendix 6 Public interest test and restrictions on competition
Appendix 7 Sunsetting of existing accounting standards under the Legislative Instruments Bill 1996
Bibliography
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