The New Zealand Accounting Standards Review Board (ASRB) is to undergo a transformation to a new regime where they are going to be replaced with in effect from the 1 July 2011. ASRB will be replaced by an the External Reporting Board to be known as (XRB) which will have a much broader range of powers .Where it will be responsible for all needs of financial reporting and also for accounting and auditing standards setting .Most of the members are been appointed for a term of five years from the date then XRB starts and are members of ASRB.
In regards to accounting standards where sector neutral standard-setting environment are the same as in standards that apply to all entities regardless of whether they are in for a profit-motive or not. Where sector specific is where NZICA holds the view that when financial reporting objective of providing information where it is useful to external users of financial reports where it is common across the three sectors.
Since 1984 New Zealandâ€™s development of accounting standards in New Zealand have changed and have undergone a process of comprehensive deregulation where the main principle of this deregulation has been to improve the efficiency of the financial sector where more competitive. Promote market discipline in financial markets .A time where the public sector reform whereby the government is called to be efficient, accountable and also effective. The reason for this outcome is the reform was general move to accrual based financial statements where New Zealand was the first country to be able to provide national financial statements on an accrual basis in 1992.
National financial statements have been influenced by the International Accounting standards board for the profit entities. ASRB is a crown entity which was established by the Financial Reporting Act 1993 it is responsible for high quality financial reporting in New Zealand and reviews and monitors developments in financial reporting. It is in charge of approving the accounting standards for all entities ,it is primarily a review of the IFRS where a small group of charted accountants are responsible for work of what changes if there are any changes that need to make IFRSs acceptable to use in New Zealand .In 1985 the ASRB came up with a draft of Accounting Standards and General Accounting Principles for use in the public sector in 1987 issued a set of accounting standards which were for all entities .Where towards the end of the 80s New Zealand had a set of broad accounting standards and concepts. Economic events and other problems in the political sense caused a shift in public sector standards and a move towards sector neutral accounting standards.
In the 90s accounting standards process changed markedly. The share market crash of 1987 there developed and impression it somehow crashed itself at least the intensity of the crash was where the standards were not of quality. Investors were taking a global approach to investment choice .So ASRB made accounting standards to IAS first of which they would make a draft to a standard and then making it a standard. The development of sector neutral standards was that the accounting between the two sectors made them both stronger.
Increase in globalisation made countries like Australia and New Zealand develop on international harmonisation and convergence of standards but the time considered to morph in to full change of IFRS was considerably long .New Zealand in effect has also adapted IFRS for the New Zealand public .And issue that USA is facing and which it is most crucial to which companies are facing in 2011 a convergence to IFRS.
At this time New Zealand had been using the use of IFRS .The decision was to be made of changing to the IFRS as New Zealand standards had to make many changes over the years with lots of maintenance to standards .Where the change took place in 2007 where entities had to apply IFRS .The set of standards were made to New Zealand conditions in sense of NZ IFRS .They had to rewrite IFRS starting with the first standard .With the NZ framework and to think about the different industries involved and that were going to be use the standards so specific issues had to be considered. IFRS changes made to the NZ standards had to be industry specific .Advantages to adopting IFRS where many but there always the problems that could be faced and there were many challenges such as satisfying the public sector that NZ IFRS were as useful to that sector and making of NZ entities that produced external financial reports.
The history of New Zealand accounting standards and the development of them over the years has came to a thought that the introduction of the public sector standards the effect of the ongoing problems in international accounting standards and the introduction of sector neutral standards which was the most significant for and accounting profession in New Zealand .As NZ is so small the way in adjusting the standards to suit the different groups in the economy .As they adopted to IFRS it made it show the problems of accounting for public sector and different sized entities which the government reviewed making a major restructure of financial reporting in NZ .A very important time when the decision to adopt sector neutral standards in the 90s to acquire the role of international standards which were greater than the size it could warrant it gave a guide to the NZ to alter its standards. Changes to the framework will take the standards to a new phase.