Question

act3.2

What is the relationship between the AASB, the Australian Government and the international standard-setting bodies? Discuss in 100–120 words.

Answer 1

The AASB is an Australian Government agency, reporting to the Parliamentary Secretary to the Treasurer. The AASB’s principal funding is via parliamentary appropriation under the Australian Treasury portfolio. Significant funding is also received from the States and Territories.

The International Accounting Standards Board (IASB) is part of the IFRS Foundation and is an independent private-sector organisation based in London. The Australian Government provides a significant annual monetary contribution to the activities of the IASB.

The IASB is committed to developing, in the public interest, a single set of high quality, global accounting standards that require transparent and comparable information in general purpose financial statements. In pursuit of this objective, the IASB co-operates with national accounting standard-setters (like the AASB) to achieve convergence in accounting standards around the world.

The International Public Sector Accounting Standards Board (IPSASB) is a board of the International Federation of Accountants (IFAC). IFAC is funded principally by its members, which are professional accounting bodies from around the world. Those bodies may propose nominations for membership of the IPSASB and other boards of IFAC.

The IPSASB focuses on the accounting and financial reporting needs of national, regional and local governments, related governmental agencies, and the constituencies they serve. It addresses these needs by issuing and promoting benchmark guidance and facilitating the exchange of information among accountants and those who work in the public sector or rely on its work. The AASB considers the work of the IPSASB in developing and issuing accounting standards for public sector entities in Australia.