Main Theories That Explain the Politic Process of Accounting Standard Setting and Regulatory Process Essay

Choose champion of the 3 main theories that explain the politic do by of accounting standard setting and regulatory process in Australia. Explain critically the main elements of this theory and illustrate with examples. How does this theory operates in the real world. earth provoke theory holds that dominion is supplied in response to the demand of the universe as a moment of inefficient or unfair market practices. Initially it is assumed to benefit society as a whole preferably than particular vested wagers. The regulatory body is considered to represent the interest of the society in which it operates rather than the private interests of the regulators and that the goernment is a neutral arbiter. Economic markets are imperfect, this is due to the lack of competition, barriers to entry, information gaps between buyers and sellers, as well as public good.This leads to a deprivation for intervention to protect the general public and consumers. Regulations takes interest of the public through legislative actions by passing laws and make sure everyone complies. Public interest theories of ordination is aware that its purpose of achieving certain publicly desired results would not be obtained, if left to the market. At the same time, regulation is provided in response to the demand from the public for what is happening in the inefficient and inequitable markets. As a result, regulation is pursued for public, as opposed to private, interest related objectives.This was the dominant stare of regulation and still retains many adherents. It is generally felt that determining what is the public interest is a normative question and advocates of positive theorizing. It would, at that placefore object this approach on the basis that it is not possible to hold in objective aims for regulation there is no basis for objectively identifying the public interest. There are otherwise charges that was issued regarding public interest approach. These include attentio n being directed to the regulators, questions is raise, such as if the regulators are sufficiently competent and if it is possible for them to continuously act in a disinterested manner?Critics suggest that there may be questions regarding the reward (whether if it is sufficient), career and training structures for these regulators. On top of these, it is often argued that the public interest approach, have not been unaware of the need to view regulation in a broader framework over the years there is no improvement made relating to the approach. Some, while recognising thepolitical implications in the process of regulation have argued that political considerations be excluded and that accounting remain only have-to doe with with measuring the facts. In weakly of the above discussion, if taken at face value, it would seem unduly naive. However, over the years it have been the detail of much accounting debate that is, the false belief that accounting is value neutral and only conce rned with reporting the economic facts. For most of the period, the accounting profession sought to maintain a regime of self regulation.The professional bodies have attempted to develop generally accepted accounting principles (GAAP) and after which, followed by a conceptual framework that would serve as the basis of an accounting theory. The search for GAAP and a hypothetical framework have been a struggle due to different viewpoints on the necessity and form of regulation resulting in considerable tensions. The involvement of accounting and professional accountants in spectacular line of products collapses and major cases of business fraud has ensured the need for accounting regulation. Thus, there has been a public interest concern that resulted in the need of regulation pressure from various segments of society has demanded regulation.