Using a proportional odds model to analyze the factors that influence accounting standard setting lobbying in Australia

Article Abstract:

The primary aim of this study was to test the hypothesis that, when making written submissions to the accounting standard setting bodies, lobbyists place the same level of importance, on: (1) the ASRB Release 100 accounting standard evaluative criteria, (2) differential reporting, (3) the 'relevance' of the proposed financial reporting disclosures, and (4) the 'reliability' of those disclosures to general purpose financial statement users. The secondary aim was to determine if these qualitative factors are afforded different levels of importance by different lobbying groups, viz., public practitioners, corporate accountants, government accountants, and academics/individuals. The responses to a survey of formal lobbyists were examined using a proportional odds model which utilizes the ordinal nature of the responses and employes an analysis of deviance between responses. The results showed that the sampled lobbyists, as a whole, considered the four qualitative factors of 'evaluative criteria,' 'differential reporting,' 'relevance.' and 'reliability' of financial information, to be of equal importance to their lobbying position. In addition, the ranking in importance was not consistent across the different lobbying groups. That is, company and government accountants rated the 'reliability' of the proposed reporting disclosures as the most important factor influencing the nature of their lobbying submissions, while the public practitioner and academic groups perceived the 'relevance' of the proposed disclosures as the most important. Testing the effects of the financial reporting issues underlying each of these four factors on the relative importance of those factors, revealed (1) a concern by all lobbyists that the thrust of an Exposure Draft matches the lobbyists' views on the 'relevance' of the disclosures proposed, and (2) a desire by all lobbyists that the proposed financial reports faithfully represent the underlying transactions of the entity. (Reprinted by permission of the publisher.)

Analysis, Lobbying

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Accounting for goodwill on consolidation before and after AAS 18

Article Abstract:

The paper examines accounting practices in the treatment of goodwill on consolidation by listed companies in the periods before and after the application of AAS 18. A previous study established that prior to the advent of AAS 18, considerable diversity existed in this area of accounting practice. The accounting profession sought through AAS 18 to seek uniformity in the treatment of goodwill on consolidation. The survey evidence shows there is a high level of non-compliance with this standard, hence substantial diversity continues. (Reprinted by permission of the publisher.)

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Company participation in the Australian accounting standards setting process

Article Abstract:

Public accessibility to the records of standard setting organisations has encouraged research into the processes involved and the final outcomes. There is also a need to examine the standard setting process by enquiries directed towards the activities of external groups with an interest in the processes. This paper details the results of enquiries into the activities of listed Australian companies toward standard setting and provides an explanation of why some firms participate in the standard setting process and others do not. (Reprinted by permission of the publisher.)

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