Analysis of the Regulatory Framework of Australia and United Kingdom (UK)

Running head: CONTEMPORARY ACCOUNTING
Contemporary Accounting
Name of the Student
Name of the University
Author’s Note

1CONTEMPORARY ACCOUNTING
Analysis of the Regulatory Framework of Australia and United Kingdom (UK)
AUSTRALIA
The main responsibility of developing and presetting the principles and standards of
financial reporting lies on the governing agency named Australian Accounting Standard Board
(AASB) (aasb.gov.au, 2018).
Problems
AASB has to face certain issues while setting the accounting standards. Specifically, one
of the major problems in the process of Australian financial reporting system is the concern of
AASB with the reliability and relevance of the financial information obtained from the financial
statements of the companies. It can be observed that business entities have to face huge cost in
the adoption of financial reporting framework of AASB and IFRS and it can be considered as
another problem of the Australian financial system (aasb.gov.au, 2018).
Working Process
The earlier discussion shows the fact that authority of decision-making in the Australian
financial regulatory environment lies on the hands of AASB as the main responsibility of AASB
is the issue and maintenance of standards for financial reporting. The governing body of AASB
operates under the control of Australian Securities and Investments Commission Act 2001
(rba.gov.au, 2018). Another major part of the financial regulatory environment of Australia is the
Australian Securities and Investments Commission (ASIC). As per the responsibilities, the

2CONTEMPORARY ACCOUNTING
activities of ASIC involves in maintaining the integrity of financial market and projecting the
interest of customs from different fraudulent activities. Australian Prudential Regulation
Authority (APRA) is regarded as another major art of the Australian financial regulatory
environment as the responsibility of the deposit taking institutions lies on this agency. The
responsibility of the development of monetary policy and bringing stability in the Australian
financial system lies on the Reserve Bank of Australia and thus, it is considered as another major
part of the Australian financial regulatory environment (rba.gov.au, 2018).
Progress towards adoption IFRS
Australia adopted the standards of International Financial Reporting Standard (IFRS) on
1 January 2005 and Australia has registered major progress in the process of adopting the
standards of IFRS for their financial reporting over the years (aasb.gov.au, 2018). It can be seen
that Australia has adopted a trouble free process for the adoption of the principles of IFRS and
the country has been largely successful in the application of the standards of IFRS in the not-for-
profit entities for their financial reporting (iasplus.com, 201). However, it needs to be mentioned
that further modification is required in IFRS financial reporting related with the cost efficiency
and quality of financial reporting. The adoption of IFRS will make the companies and developers
in the process of moving between the sectors and countries in the presence of skill and
knowledge. One of the major projects of AASB related to the adoption of IFRS is the IFRS
Standards Adoption Review by the Australian business entities. This particular review program
will be majorly helpful in the modification in the standards and policies of IFRS for the
Australian business entities (aasb.gov.au, 2018).