Abstract:
The objective of this paper is to examine the issues pertinent to the consideration of the proposal made
by the Accounting Standards Review Board (ASRB) that New Zealand adopt the International
Financial Reporting Standards (IFRS) issued by the International Accounting Standards Board (IASB).
The purpose of this examination is to provide input to the New Zealand Securities Commission (the
Commission) to assist them in their deliberations on making recommendations on the future
development of the financial reporting infrastructure for New Zealand’s securities markets.
Similar to securities regulators across the world, the Commission has an interest in promoting a strong
securities market where the financial reporting framework and its supportive infrastructure results in
high quality, transparent and comparable financial reports. There are four identifiable components of
the infrastructure that drive the quality of financial reporting in New Zealand. 1) Financial reporting standards; 2) Corporate governance; 3) External audit; 4) Enforcement.
The scope of this paper is limited to an assessment of the first of these components financial reporting
standards; with an emphasis on an analysis of the consequences of any decision to adopt IFRS in New
Zealand. The paper provides a framework for assessing the viability of the IASB reporting framework
as an acceptable standard-setting regime for New Zealand that is based on: 1) The quality of IFRS standards; 2) The quality of the IASB standard-setting process; 3) The extent of international acceptance of IFRS.
