Standard setter Stevenson exits AASB, Australian Financial Review, 16 July 2014 "When Kevin Stevenson looks back at the way accounting standards have evolved over the past 40 years, he's glad to have been part of the original crew who aimed to ensure financial disasters would no longer be blamed on standards. "There have been changes that benefit users of financial reports and perhaps sometimes we picked approaches too early that people were not ready for. "But I don't think there's anything we did in international standards setting that was the wrong thing to do, and you take solace from the fact that you're heading in the right direction." Mr Stevenson retired at the end of last month after a five-year term as chairman of the Australian Accounting Standards Board. He had a long association with standard setting, which started in the 1970s at the then-Australian Accounting Research Foundation. Mr Stevenson has also retired as a member of Australia's Financial Reporting Council (FRC), and will now spend his time writing, among other things. He leaves having delivered a set of world-class accounting standards - firstly as a promoter of 'principle-based' standard setting and in developing the conceptual framework for financial reporting. When it comes to the assessing of financial information we have improved "light years", he said. "If you go back to the scandals of the 1960s and 1970s much of the criticism was around the absence of accounting standards. Roll forward to today and I can't remember the last time a scandal was attributed to standards." Mr Stevenson believed criticisms that the global financial crisis - or failures such as Enron -were a result of improper standards to be unfounded. The standards were there, it was simply that people chose to ignore them. When the Enron bankruptcy occurred, Mr Stevenson was the technical director of the International Accounting Standards Board (IASB). Questions were flowing as to the role and responsibility of its then-external auditor, Arthur Andersen. "I remember people were asking questions like, would the scandal have happened under international standards rather than US standards? "My answer was if they didn't follow American standards, they wouldn't have followed international ones."

And regarding the more recent events that led to the global financial crisis, he says, "I don't think the problems came about because of standards but because of a boom market that could never be -sustained." During his career Mr Stevenson also established a research centre within the AASB, chaired the Asian-Oceanian Standard-Setters Group (AOSSG) for a two-year term, and was a founding member of the Accounting Standards Advisory Forum of the IASB. He played a key role in establishing the 2005 'stable platform' of International Financial Reporting Standards (IFRS) for adoption in Europe and domestically. Australia has always led the way in having the most robust accounting standards internationally. "I am critical of Europe, which came to international standards in 2005 and was reluctant even then." Mr Stevenson faced his share of critics - especially in the move towards a conceptual approach to financial reporting. "People may have criticised us for being too academic, but perhaps they were critics because it revealed answers those people didn't want to show. "Those who oppose improvement in financial reporting generally have a vested interest. Take the current debate in lease accounting - people don't want to show assets and liabilities involved; they're fearful customers will do less leasing if it's all on the balance sheet. "But in my view, leasing is just another form of accounting." Another criticism is that with more regulation and standards, financial reports become too complex. But Mr Stevenson said it was unlikely financial reports would be simplified for the average person to understand. "You protect the mums and dads by ensuring the market is well informed. "But we're never going to have mums and dads understand the complexities of derivatives and foreign currency exposures and the like."

REQUIRED a) Kevin Stevenson was crucial in developing the conceptual framework for financial reporting. What groups do you think regulators like Kevin Stephenson had in mind when developing conceptual frameworks projects? Explain how and why you believe this to be the case. Use regulatory theory to explain your answer/s.

Do you believe that conceptual frameworks have adequately provided prescription in relation to measurement issues? Explain with reasons.