Through the FRCs strategic direction the AASB too lost control over its agenda

Through the frcs strategic direction the aasb too

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Through the FRC’s strategic direction, the AASB, too, lost control over its agenda due to the lack of a formalised agenda setting process and clarity around the issuance of broad strategic direction. While the FRC has taken measures to ensure a due process before issuing strategic directions, the AASB has not developed a more formalised agenda setting process to safeguard against losing control over its agenda. Third, the new regulatory institutional environment resulted in a situation where private sector and public sector accounting standard setting issues had to compete in the context of a majority of private sector board members at the FRC and the AASB. As noted above, at the FRC, members with private sector backgrounds over-relied on the expertise of members with public sector background. At the AASB, public sector members felt disadvantaged because private sector issues dominated the AASB’s agenda. This indicates that there are efficiency and effectiveness issues when there is a single standard setting body that considers both private and public sector accounting. Last, the regulatory institutional environment also provided a justification for why the AASB initially rejected the GAAP/GFS harmonisation project, despite the fact that public sector constituents highlighted a need for consideration of a certain issue:
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265 budgetary reporting. The AASB did not see itself as a standard setter for ex-ante budgetary reporting. The PEs and other public sector constituents saw budgeting as a main component of the GAAP/GFS harmonisation project. This issue has not yet been addressed despite the recognised importance of budgets in the public sector and requests from public sector constituents. The IPSASB has, for example, identified budget reporting “as a key public sector specific issue” (IPSASB 2004a, Preface). The IPSAS has also recognised that whether budget reporting falls within its mandate is a contentious issue (IPSASB 2004b). This recognition suggests that there might be a regulatory space to be filled or contested considering current accounting standard setting bodies focus their activities on ex-post financial reporting, whereas statistical bodies have already developed frameworks for ex-ante financial information, such as the GFS framework. The thesis confirmed the political nature of the agenda setting process and highlighted the desire and need for key actors in this process to be politically sophisticated. The thesis showed that the PEs were highly skilled and politically savvy individuals who managed to sidestep the AASB’s decision by applying these skills. This suggests that members of standard setting boards and, in particular, the Chairpersons as leaders of these boards, should be able to act and negotiate in a political environment to ensure that they are not ‘overrun’ by PEs or strong collective actors and don’t lose control over their agendas. The political environment includes other standard setting national and
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  • Fall '13
  • Government, The Land, International Financial Reporting Standards, Financial Accounting Standards Board, Australian Accounting Standards Board, Snow

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