Accounting Policy Makers

Accounting policy makers

There are two main groups which determine accounting policy. First, the Government employs the legislative process to ensure that a minimum level of information is disclosed in company reports. It also acts as a spur to prompt the accountancy profession into action, where there is an apparent urgent need. An example of this influence was the establishment of the Sandilands Committee by the Government to consider the problem of accounting under conditions of price-level changes. Another example was the Employment Protection Act, 2014, which places a general duty on the employer to disclose information requested by trade union representatives at all stages of collective bargaining.

Second, the accountancy profession itself acts as a regulatory body and deals with the problems of accounting standards implied in financial reports. The influence of the accountancy profession in making accounting policy is discussed elsewhere.

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Payoffs from Accounting Methods

Staubus lists potential positive and negative payoffs to various groups which result from producing one particular type of information under general headings, as follows:

(A) Potential positive payoffs from an accounting method

Direct payoffs to parties associated with the entity, namely, present and prospective owners, creditors, suppliers, customers, employees and government taxing and regulatory bodies, through

(i) improvements in their own decisions, using information supplied by the entity and produced with the accounting... see: Payoffs From Accounting Methods