Exam 3: Role of Theory in Accounting Regulation

Individual countries must decide the extent to which IASB standards will be followed by public sector entities.

The Norwalk Agreement is the name of the IASB and the FASB convergence program.

Which theory of regulation assumes that politicians are not neutral arbiters?

US GAAP have been described as principles-based standards and IAS standards as rule-based.

Public-interest theory shows that capital markets are performing more efficiently as a result of government intervention in the standard-setting process.

Which of these is not an assumption underlying regulatory capture theory?

In relation to accounting and auditing which of these is not a theory of regulation?

Which of these factors should not affect the extent to which particular countries are able to influence the international standard-setting process?

Regulatory capture is said to occur in which of the following situations?

The development of international accounting standards began in 1990 with the formation of the International Accounting Standards Board.

Private interest theory suggests that government intervention in the standard setting process is to rectify failures in the market for accounting information.

Users of accounting information who bear little of the cost of producing the information and therefore have an incentive to demand increased levels of disclosure are know as:

"Standard setting is a political process'.Explain and discuss.

Regulatory capture is more likely to occur when the regulatory agency has individual members who have the potential to be employed in the future by the industry they are involved in regulating.

Private interest theory asserts:

Prior to 2005 International Accounting Standards (IAS)were influential in which of the following ways? I They were adopted for use in countries without national standards II They were used in the development of national standards III They were used voluntarily in preparing consolidated accounts in some countries

The abandonment of due process by the ASRB in favour of fast-track approval of AARF-submitted standards was an example of which regulatory theory?

In Australia all corporate governance requirements are embodied in the Corporations Act.

Under the regulatory capture theory of regulation interest groups are assumed to try to gain control of the regulator to achieve their desired wealth distribution.

Briefly describe the public interest and the private interest theories of regulation and,for each discuss,a situation where the theory can be used to explain an aspect of accounting regulation.