The text describes a theory of regulatory capture.

(a) What is regulatory capture?

(b) How can standard setting bodies such as the AASB avoid regulatory capture?

(c) If a standard setting body is 'captured' by the profession, are there any steps that the government can take to make the body independent? If so, should the government take those steps? Justify your answer.

(d) Do you believe that the current international accounting standard setting arrangements, based around the IASB, are at risk of regulatory capture? Why or why not?

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