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Australia represents the few nations in the world in which accounting has been properly regulated and meets the international accounting standards. This is an inclusion of both the professional and technical accounting standards. The remarkable accounting standards in Australia can be credited to its well established bodies and infrastructures as well as a rich accounting regulation history. Some bodies that have been behind this achievement include the Australian Accounting Standards Board (AASB) which was established in 1989. Other bodies that are in full support of this board include the Self-regulation and Private Regulation systems. Accounting regulation in Australia can be traced back in history upto the 19th Centaury when measures and standards were enacted to all accounting professionals. These regulations were modeled from the original accounting rules that had been established earlier in United Kingdom to monitor her professionals. Together with other professional schemes, the main intent of the standard regulation was to maintain services that were of high standards including inhabitation of conducts that were regarded unseemly like discounting of fees and being able to come up with high barriers that would regulate the entry of professionals. Since then there have been several developments in the Australian accounting standards such as the trade practices legislation in the mid-1970’s and the Trade Practices Commission. The accounting professional review that took place in 1992 has also had great impact on the professional accounting regulations and standards.
Professional Associations for accountants in Australia
One of the major steps that Australia took in order to achieved a properly regulated accounting system was to have a strong professional association for accountants which have helped the nation have a long operating accounting scheme, have been in the fore front in the regulatory framework in accounting competition policy and trade practices and have also been up to date with the market developments. These associations also provide the nation the chance to self regulate its professionals. Some of the professional associations in Australia include the CPA Australia, the Institution of Chartered Accountants in Australia (ICAA), the National Tax and Accounting Association Ltd and the National Institute of Accountants. The ICAA and CPA form the largest accounting bodies in Australia offering the Australian market with more than 90, 000 and 130,000 accountants who meet the international accounting standards respectively (Dagwell 2007).
Accounting Standards demands
The Australian government on its part has established laws that have set high standards for the households and businesses found in all parts of the nation. Such laws are meant to ensure that the accounting standards are not only observed by the professionals but also the institutions that make the most of accounting. The regulation laws demand that large corporations in the country to have their own accountants who will be expected to carry out the daily accounting tasks such as foreign exchange, tax management, internal audit, financial accounts preparation and treasury. Regulations like the corporation law expect the institutions accounts to be audited by an auditor that is from a registered company (Medlin and Edwards 000). Some households and private individuals are expected by the laws to have accountants or registered individuals at the same time lodge and prepare supply financial advice and tax returns. The government together with other business enterprises have employed their own accountants but still make use of resources from external accountants and consultants so as to achieve a diverge range of accounting services such asset valuation, statutory audit, time management and economic analysis
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Measures put in place to improve the accounting regulation standards
Due to the market nature which is very competitive, the accounting regulation measures in Australia face several challenges to some extend being regarded as being not tight enough. There has been several market accounting failures which have called for accounting professionals to operate and associate under some codes and conducts that can be viewed to be lowering the standards of ethical values and professional practices. To check on these, the nation has set measures that will constraint preventing dishonest and unqualified accountants to carry out accounting practices in practices in public. The public is also to be informed on accounting issues to enable them make appropriate choice when it comes service providers. Another step in trying to achieve a well regulated system is the reversing of the accountant title on individuals making them meet a number of professional criteria (Groom and Rapti 2008).
This will help in overcoming the failure in information at the same time lessen the current negative externality. This licensing option will also have to talk into consideration legislation as this would be a costly and difficult if enforced overtime. Having a code of practice is also an option in trying to address the market failure. This option targets the accountancy professionals that are like minded to come together and set professional and ethical sanctions and standards for non compliance. Differentiation of accounting services is also an option worth considering by particular individuals, accountants, partnerships or cooperation. All the above mentioned measures and bodies set by the Australian government have in the long run ensured that the accounting system in the country has been appropriately regulated.