Accounting Business Reporting for Decision Making

CHAPTER 1 Introduction to accounting and business decision making 15

The AASB’s standard-setting process is illustrated in figure 1.2.

Identify technical issue

Add issue to the agenda

Research and consider issue

Submission to international organisation

Comments from stakeholders

Issue standard or other pronouncement

Implementation and compliance

AASB activities Australian organisations and individuals

International standards organisations

AASB standard-setting process

Consult with stakeholders

Identify technical issue

FIGURE 1.2 AASB current standard-setting process

Source: Australian Accounting Standards Board 2015, About the AASB, http://www.aasb.com.au.

Regulation in New Zealand

Accounting and auditing standards in New Zealand are set by the External Reporting Board. The

External Reporting Board (XRB) is an independent Crown Entity, established under section 22 of the

Financial Reporting Act 1993, and subject to the Crown Entities Act 2004. For more information about

the XRB, refer to its website, http://www.xrb.govt.nz.

In 2011, the New Zealand government announced changes to the financial reporting requirements

for New Zealand entities. These changes are enacted in the Financial Reporting Act 2013. The main

change is that many small and medium sized New Zealand companies will no longer need to prepare

accounting reports using New Zealand generally accepted accounting practice (GAAP). Complemen-

tary to this, the XRB announced that, for financial reporting, New Zealand would change from a single

set of sector neutral accounting standards to a multi-sector and standards approach. The full effect

of these changes will take place in 2016. Prior to these changes the reporting requirements between

Australia and New Zealand were similar, particularly having sector-neutral accounting standards. Now,

New Zealand is similar to the international standards where the for-profit publicly accountable entities

will use New Zealand equivalents to the International Financial Reporting Standards (NZ IFRS) and

public benefit entities (not-for-profit and government sector) will report using PBE standards, which are