The Landscape for Accounting Regulation in NZ (Presentation Slides)
72 Pages Posted: 20 Nov 2015 Last revised: 10 Jun 2018
Date Written: May 27, 2018
This set of 72 powerpoints have been used in undergraduate teaching as a guide to “The Landscape for Accounting Regulation in NZ” covering (1) Who makes the “rules”. (2) Who “polices” the “rules”? (3) What are the “rules”? It includes a brief discussion of: • Legislative origins • The Rules of the “Game” • Who is responsible for issuing NZ GAAP? • What is GAAP? • What constitutes GAAP? • The regulatory environment of “business” • Auditors’ primary responsibilities • Civil Society Organisations • “Reporting entity” definition in NZ
This study includes a breakdown of the composition of 2,600 (or around that total) of entities which apply IFRS in NZ (including around 2,000 large company entities); and also analysis of the composition of the 4,250 entities in NZ which are required to comply with the New Zealand International Public Sector standards (including around 1400 large charities and more than 2400 schools).
What about the rest: the entities left out of this Framework? Around 595,000 for-profit small and medium companies (SMEs) do not have to follow the requirements to produce annual financial reports under Generally Accepted Accounting Practice. SMEs often produce financial statements only for the purposes of meeting the information needs of owners, the tax authority or banks. Both Chartered Accountants Australia and NZ and the Inland Revenue Dept. in NZ have offered guidance to accountants or others preparing these accounts
Appendix one to these slides includes some coverage of a some key differences between IFRS and IPSAS standards for NZ entities. Appendix two describes in detail that when NZ took the global IPSAS and adopted them for public benefit entities, there were some standard changes and additions, as described in this appendix. One frequent change reflect the need for the statement of comprehensive revenue and expense (IPSAS refer only to the presentation of a statement of financial performance). Although it is regularly claimed that none of the NZ adaptations of IPSAS affect measurement and recognition requirements, it can be observed in Appendix 2 that other adaptations are not restricted only to layout, disclosures, and illustrative examples, and may in fact impact on measurement.
Keywords: New Zealand, NZ, financial reporting, NZ IPSAS, NZ IFRS, tiers, Not for profit entities
JEL Classification: M50
Suggested Citation: Suggested Citation