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Understanding participation in accounting standard‐setting: the case of AASB ED 192 Revised Differential Reporting Framework

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  • Karen Handley
  • Elaine Evans
  • Sue Wright

Abstract

This paper explores the motives of participants in the standard‐setting process, based on the premise that standard‐setters strive for standards that are useful for decision‐making by a wide range of financial statement users. Our setting is the development of a contentious but contained Australian accounting standard, Reduced Disclosure Requirements. A consultative process initiated by the Australian Accounting Standards Board to create a specific Australian accounting standard for differential reporting provided an opportunity for interested parties to participate. We analyse the motives of participants through semi‐structured interviews with members of the Australian Accounting Standards Board and comment letter writers who responded to the relevant exposure draft. Our findings identify participants’ economic and political motivations and question the ability of the current standard‐setting process to extract decision‐making requirements from a wide range of users of financial statements and to reflect these in financial reporting standards. We find that the perspectives gathered are homogenised and that the process privileges the voices of powerful elites.

Suggested Citation

  • Karen Handley & Elaine Evans & Sue Wright, 2020. "Understanding participation in accounting standard‐setting: the case of AASB ED 192 Revised Differential Reporting Framework," Accounting and Finance, Accounting and Finance Association of Australia and New Zealand, vol. 60(4), pages 3621-3645, December.
    • Handle: RePEc:bla:acctfi:v:60:y:2020:i:4:p:3621-3645
    DOI: 10.1111/acfi.12490
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    References listed on IDEAS

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