Politics of Financial Reporting and the Consequences for the Public Sector

Authors: RYAN, CHRISTINE¹; GUTHRIE, JAMES²; DAY, RON²

Source: Abacus, Volume 43, Number 4, December 2007 , pp. 474-487(14)

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Abstract:

This article examines the political processes surrounding public sector accounting standard setting, in particular, the Australian decision to adopt sector-neutral International Financial Reporting Standards (IFRS). It contends that the history of private and public sector involvement in the accounting standard setting process to date, and recourse to regulatory theory, assist in understanding these contemporary developments. The article reveals that private sector interests have dominated accounting standard setters at all important stages of standard setting in Australia. It concludes by arguing that, given this continued neglect by standard setters, if public sector financial reporting standards are to remain relevant to the public sector, then it may be necessary for public sector regulators to set their own standards.

Keywords: Financial reporting; IFRS; Regulation; Sector-neutral; Standard setting; Theory

Document Type: Research article

DOI: http://dx.doi.org/10.1111/j.1467-6281.2007.00243.x

Affiliations: 1: School of Accountancy, Queensland University of Technology 2: Discipline of Accounting, The University of Sydney

Publication date: 2007-12-01