Case Study: Political Activity and Regulatory Capture of ASRB

This case study examines the Australian Accounting Standards Review Board (ASRB), focusing on political activity and regulatory capture. It details the ASRB's formation, objectives, and the challenges faced due to industry objections and conflicts with professional bodies like ICAA and ASA. The analysis covers the implementation of accounting standards, compliance issues, and the influence of political bodies like the Ministerial Committee for Businesses and Securities. The study highlights instances of non-compliance, the impact of the capture theory, and the role of key individuals and organizations in shaping accounting regulations. The case also discusses the evolution of accounting standards, the importance of compliance, and the consequences of regulatory capture on the effectiveness of accounting practices. The conclusion emphasizes the importance of collaboration between accounting parties and highlights the ethical implications of non-compliance.

CASE STUDY LAW

Contents
Contents...........................................................................................................................................2
INTRODUCTION...........................................................................................................................1
Australia’s ASRB: A case study of Political Activity and Regulatory ‘Capture’.......................1
CONCLUSION................................................................................................................................3
REFERENCES................................................................................................................................4

INTRODUCTION
The article provides a glimpse on regulatory and political activity ‘Capture ‘case study.
The reasons of being opposed and the impacts are highlighted in this context. It elaborate the
regulatory agreements made by ASRB but not implemented by act through the, code of the board
along with Companies Act. Two years of retrospect also covered with regulatory capture.
Australia’s ASRB: A case study of Political Activity and Regulatory ‘Capture’
ASRB was formed in 1984 to enriching the scope of accounting standards and rules
concerning with the low level of governance and community development. The accounting
professional standards also assisted the board in this direction. The conflicts rose due to
objections by professionals (Gray and et. al., 2019). The industry had objected the board's
recommendations. The path was kept closed in this area for continued resistance to provisions
that had lowered the ability of both the practitioner to regulate the method of standard formula.
These concerns were overridden by the Ministry Committee for Businesses and Securities, but it
prevented providing the ASRB further official power. To implement its objectives, the
Committee lacks the power. Recently, established ASRB has been susceptible if
counterproductive — and faced delays and problems in obtaining and handling professional
applications. The Committee discontinued previous attempts to ensure greater community
involvement in its operations since two years and confirmed' fast track ' processes to also be
implemented to those norms that the practitioner decided to request for evaluation. In 1969 the
accounting conference happened in order to formulate statuary accounting standards. However,
the accounting body for the professional standard and needs. The professional standards review
committee of ICAA.
There are two main accounting parties formulate the accounting rules and legislations as
the Institute of Charted Accountants of Australia (ICAA) and the Australian Society of Accounts
(ASA). Compliance was the major issue in the year 1971 raised by institute. ICAA was also
include the ASA to work with more efficiently and better conductivity of programme in 1972.
Both funded the Australian Accounting Research Foundation (AARF) which was considered as a
rule drafting authority. Society members were required by the authority in terms of complying
the accounting standards and rules. It is evaluated by the group that compliance and the
monitoring sections was implemented with minimal aspects and various members were involved
1

in misconduct of accounting standards. Considering this, few proposals for greater government
involvement was recognised to enhance the scope of accounting rules. In 1974 the
Commonwealth Attorney-General and Robin John Batterham, Engineering and Innovation
Council, is a member of the Commonwealth announced a Companies and Securities industry bill
that was regulated proposal in order to establish a corporation and Exchange commission. This
council was Due to not changing the government this act left of being enacted.
In 1970 lots of cases come across regarding compliance and corporate affairs. The commission
analyse the financial statements of 8699 companies for the year ended 1978-82. It was found that
41% of companies failed to adhere more than one accounting rules. The cooperative scheme was
introduced by collaboration of commonwealth government and state government. Before 1961,
Numerous Australian stated had formed their own companies and corporate laws. Legislations
was uniformed in terms of jurisdiction. Within two years the ASRB adhered the guidance and
laws produced by Ministerial Council. The criteria were engaged in managing the accounting
standards with conceptual framework. Lack of productivity was major issued which was faced
by organisation and resolved through allocating resources at required areas and places. The board
was able to correlate the responsibilities and changes with the copyright in approved accounting
standards and roles. The ICAA and ASA both sustained their efforts to change the
responsibilities and rights of board. In meantime the group analysed the essentialness to
framework and introduced four major criteria to evaluate the standards. Which are as follows;
1. Whether the information is related to the proposed standard to recognised decision
making and discharged director’s answerability.
2. Whether it is formulated in proper structure and conceptually derived.
3. Whether it is consistent or approved accounting standard in terms of acceptability.
4. Whether the accounting standards are practicable or essential in terms of implementing
in real practice.
ICAA's president in year 1985 had made a claimed towards that it had commonly expected that
just after establishment, ASRB will give consent or provisional consent to almost all the
Australian Accounting Standards (Carollo, T. 2019). These are generally created where variety
has occurred in applying a standard's demands. An accounting standard is a analytical statement
setting out the bookkeeping needed for specific kinds of operations and occurrences. Accounting
conditions have an impact on preparing and presenting the financial reports of an organization.
2

As per according to the Capture theory perspective Heading3.8, mining industry operated by
Robin John Batterham, appointed as Chief Scientist of Australia, a role which he undertook
simultaneously to acting as chief technologist for the multinational mining company Rio Tinto
favored the process which facilitate towards deposition of greenhouse gases underground. For
this as per according to the sustainable and social responsibility government approval is required
to prior undertaken as to undertake this process.
CONCLUSION
The above description defines the conceptual argument and misconduct of roles among
authorised parties. It is concluded that misappropriation and authentication between local and
national accounting standards become the reason of non-compliance and avoidance. This not
only enhanced the unethical accounting practices but also devolved the structure of effective
conjunction of accounting parties. The article defined that how combined effort of IACC and
ASA help to resolve issue in more effective manner.
3

REFERENCES
Books & Journals:
Gray, S. J and et. al., 2019. Extractive Industries Reporting: A Review of Accounting Challenges
and the Research Literature. Abacus, 55(1), 42-91.
Carollo, T. 2019. Political Influence in the Standard Setting process (Bachelor's thesis,
Università Ca'Foscari Venezia).
The role of state accounting transparency, 2012. [Online]. Available through:
<https://books.google.co.in/books?
id=_HHDCwAAQBAJ&pg=PA195&lpg=PA195&dq=A+case+study+of+political+Activ
ity+and+regulatory+capture&source=bl&ots=3JlULGhJhu&sig=ACfU3U0xF_e0ee01U
WGWQcp_7NzXfGJ7Yw&hl=en&sa=X&ved=2ahUKEwiYr53vuZvkAhUJqY8KHYLz
Bio4MhDoATACegQICRAB#v=onepage&q=A%20case%20study%20of%20political
%20Activity%20and%20regulatory%20capture&f=false>.
4