01whole.pdf (2.23 MB)
Accounting standards for Australian SMEs: identifying, considering and incorporating the needs of users into financial statements
thesisposted on 2022-03-28, 01:00 authored by Karen Handley
In July 2010, the Australian Accounting Standards Board (AASB) released an Australia-specific differential reporting standard known as the Reduced Disclosure Requirements (RDR) standard. The RDR is based on the measurement and recognition principles of the International Accounting Standards Board’s (IASB’s) International Financial Reporting Standard (IFRS) with reduced disclosure and is targeted at non-publicly accountable reporting entities. In selecting this choice for Australian use, the AASB completed a very short consultation period following on from the release of the International Financial Reporting Standard for Small and Medium-sized Entities (IFRS for SMEs). The haste with which the standard was introduced was contentious, as was the decision of the AASB not to adopt IFRS for SMEs. The AASB also did not implement the full proposed change outlined in their Consultation Paper, which they had hoped would incorporate the removal of the reporting entity concept as it is applied in Australia. This thesis is set within the context of the development of the RDR standard. Included are three papers examining aspects of the standard setting process within this context. First, a synthesis of the issues facing the AASB and preparers of financial statements, the nature of participation in lobbying and the identity of users of the financial statements of non-publicly accountable entities are extracted from the comment letters in response to the AASB’s Invitation to Comment 12 (ITC 12). Second, the results of a survey of Australian accounting practitioners highlight the reporting practices of Australian entities. In addition, the awareness of members of the stakeholder community of the solutions offered by the AASB during the consultation period for the RDR is reported. These findings provide insight into the gaps between standard setters and other stakeholders. Finally, the motives of stakeholders for participation and non-participation in the development of the standard are established using a survey. These survey findings are supplemented by interviews with key stakeholders, to question the method by which the standard setter determines and preserves the public interest. Having examined the standard setting process, this thesis concludes that the processes designed for standard setting for listed entities may need adaptation when seeking input from stakeholders of non-publicly accountable entities or SMEs.