a.

What arguments can be raised to support the “politicization” of

accounting rule-making?
b. What arguments can be raised against the “politicization” of
accounting rule-making?
CA1.9 (LO3) (Models for Setting IFRS) Presented below are three
models for setting IFRS.
1. The purely political approach, where national legislative action
decrees IFRS.
2. The private, professional approach, where IFRS is set and
enforced by private professional actions only.
3. The public/private mixed approach, where IFRS is basically
set by private-sector bodies that behave as though they were
public agencies and whose standards to a great extent are
enforced through governmental agencies.
Instructions

a. Which of these three models best describes international

standard-setting? Comment on your answer.
b. Why do companies, financial analysts, labor unions, industry
trade associations, and others take such an active interest in
standard-setting?
CA1.10 (LO4) (Economic Consequences) Several years ago, then
French President Nicolas Sarkozy urged his European Union
counterparts to put pressure on the IASB to change accounting rules
to give banks and insurers some relief from fair value accounting
rules amid market turmoil. Mr. Sarkozy sought changes to the mark-
to-market accounting rules that have been blamed for aggravating
the crisis.
Instructions

Explain how government intervention could possibly affect capital

markets adversely.

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