EFRAG–ConsideringtheEffectsofAccountingStandards.docVIP

Considering the Effects of Accounting Standards The Financial Reporting Standards Committee of the European Accounting Association has reviewed the EFRAG/ASB discussion paper Considering the Effects of Accounting Standards (January 2011). Our comments, submitted on behalf of the European Accounting Association, are set out in this document. We appreciate that organisations which expose documents for comment prefer, for analytical purposes, that respondents give answers to specific questions posed in the document. Nevertheless, this presupposes that the respondent shares the view that these are the relevant questions. In our case we feel that a significant omission from the discussion paper is any detailed consideration of the available methodologies (and their characteristics) for carrying out any objective assessment of the effects of accounting standards and any consideration of the possible role of academic researchers. As a professional association of researchers we have therefore provided a detailed discussion of this area, one where we hope our knowledge and experience can be used. This document falls into three parts: A summary of the positions taken. Direct responses to the questions in the discussion paper. A discussion of why, and how, academic research can assist regulators and standard setters in evaluating ex ante and ex post the effects of standardization. There is also an appendix that names the EAA members who contributed to this response. Summary Responses to the Questions in the Discussion Paper We have identified seven key questions which encompass the issues raised in the paper and which we hope should help EFRAG and its group of standard setters to finalise their proposals. What are the effects of accounting standards? The effects of an accounting standard are ‘the consequences that flow from that accounting standard’. Table 1 in our response to question 8 lists possible effects of accounting standards. The effects are much broader th