The Accounting Standard in New Zealand
On 30 June 2011, the Accounting Standards Review Board (ASRB) ceases to exist in New Zealand.
1. What is the ASRB to be replaced with, and what will be the statutory authority of this new organisation?
The current authoritative accounting board is Accounting Standard Reporting Board (ASRB). This board reviews and approves financial reporting standards and their amendments, give directions as to authoritative support of accounting policies and encourage development of financial reporting standards. This board will be superseded by External Reporting Board (XRB) on 1 July 2011. (ASRB, 2011) XRB will have a broader range of authority than ASRB and will cover the responsibility of all aspects of financial reporting and for accounting and auditing standards setting. The statutory authority of this board is the Auditor Regulations and External Reporting Bill 2010. (ShareChat, 2011)
2. Define the terms ‘sector neutral’ and sector specific’ in respect of accounting standards.
Sector neutral accounting practice uses accrual accounting in which it often portrays as a neutral component of decision making and accountability. The aim of this policy is to recognize convergence between the objectives and processes required for the management of public and private sector entities. The rules behind this policy are driven by the difference in the nature of the transactions and not by the ownership of the reporting entity. (Bradbury & Baskerville, 2007)
Sector specific accounting practice is the process by which disclosure requirements are different on some industrial type. One of the advantages of this type of policy is more transparency for the stakeholders. A disadvantage of it is that there will have different sets of rules to remember for each and every industry.
3. The development of accounting standards in New Zealand from 1984 to 2009.
Over the years, accounting bodies around the world have
1. What is the ASRB to be replaced with, and what will be the statutory authority of this new organisation?
The current authoritative accounting board is Accounting Standard Reporting Board (ASRB). This board reviews and approves financial reporting standards and their amendments, give directions as to authoritative support of accounting policies and encourage development of financial reporting standards. This board will be superseded by External Reporting Board (XRB) on 1 July 2011. (ASRB, 2011) XRB will have a broader range of authority than ASRB and will cover the responsibility of all aspects of financial reporting and for accounting and auditing standards setting. The statutory authority of this board is the Auditor Regulations and External Reporting Bill 2010. (ShareChat, 2011)
2. Define the terms ‘sector neutral’ and sector specific’ in respect of accounting standards.
Sector neutral accounting practice uses accrual accounting in which it often portrays as a neutral component of decision making and accountability. The aim of this policy is to recognize convergence between the objectives and processes required for the management of public and private sector entities. The rules behind this policy are driven by the difference in the nature of the transactions and not by the ownership of the reporting entity. (Bradbury & Baskerville, 2007)
Sector specific accounting practice is the process by which disclosure requirements are different on some industrial type. One of the advantages of this type of policy is more transparency for the stakeholders. A disadvantage of it is that there will have different sets of rules to remember for each and every industry.
3. The development of accounting standards in New Zealand from 1984 to 2009.
Over the years, accounting bodies around the world have
References: ASRB. (2011). Standards Approval. Retrieved from http://www.asrb.co.nz/Site/Standards_Approval/Default.aspx Bradbury, M.E. & Baskerville, R.F. (2007). Sector-neutral accounting standards: A ten year experiment. (Working paper series # 48, University of Auckland and Victoria University of Wellington). Retrieved from http://www.victoria.ac.nz/sacl/cagtr/working-papers/WP48.pdf Deegan, C. & Samkin G. (2009). New Zealand Financial Accounting. (4th ed., pp. 8-9). Sydney, Australia: McGraw-Hill Australia. IAS Plus: Deloitte. (2011). Summary of preface to International Financial reporting Standards. Retrieved from http://www.iasplus.com/standard/preface.htm Nguyen, T.P.U. (2010). A History of the Development of New Zealand Accounting Standards for small and medium enterprises and the future prospects of IFRS for SMEs. (Master thesis, Auckland University of Technology). Retrieved from http://aut.researchgateway.ac.nz/bitstream/10292/1008/4/NguyenU2.pdf ShareChat.co.nz (2011, March 31). News: External Reporting Board appointments announced. Retrieved from http://www.sharechat.co.nz/article/5b7ce8c9/external-reporting-board-appointments-announced.html.