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Discussion Questions (SHD) Question 7.3: -Why is it important for a standard setting body to be independent?

It is important for a standard setting body to be independent because the standards could be arbitrarily changed to suit the preferences of the current management and could result in inconsistent or misleading financial statements. To achieve a successful accountability relationship and to have their informational needs met users of government financial statements need the assurance that government financial statements are credible and have been prepared using accounting standards that are unbiased and transparent. To develop and establish standards, and related guidance, for governing financial accounting and reporting.

The setting of standards is not new. For decades, many countries have delivered high-quality, authoritative standards, through their own independent standardsetting bodies. In the public sector, financial statements are important documents that measure the governments stewardship of public funds. Independent and objective financial reporting standards are crucial to the accountability of public sector entities as they set the requirements for preparing their financial statements.

-Do you think that the present composition

of the MASB and FRF alleviates the independent issue?

In my opinion, the present composition of the MASB and FRF have alleviates the independent. This is because of tension between the Boards desires to establish a conceptual framework aligned to the International Accounting Standard Boards framework which is premised on a narrow segment of users in the capital market and at the same time also satisfy the needs of the business environment in Malaysia within which accounting operates.

On the other hand, it is a challenge for MASB to ensure that the financial reporting meets the needs of all stakeholders locally and globally. Lastly, MASB still labours to dispel some misconceptions about MASB, the key being the notion that MASB standards are not globally acceptable. MASB also lack of technical expertise is acknowledged and lack of adequate research is an issue.

Questions (GHH 7th edition) Question 7: We should disband national standard setters. They are no use following the adoption of international accounting standards. Explain whether you agree or disagree with this statement.

In my opinion, I disagree with that statement. This is because national standard setters assists participants in carrying out research aimed at the development of improved future accounting standards. Other than that, national standard setters reviews and comments on IASBs agenda and proposals for changes in international bodies concerned with financial reporting. It also provides a forum for an exchange of views and sharing of experience between participants about other issues in financial reporting, including in the public and not-for-profit sectors.

Moreover, National standard Setters supports the mission of the International Accounting Standards Board (IASB) to develop a single set of high quality, understandable and enforceable global accounting standards that require high quality, transparent and comparable information Lastly, the mission of the newly created IASB is simple.