Sustainability Accounting and Accountability Theory

Question: Discuss about the Sustainability Accounting and Accountability Theory. Answer: Introduction: Accounting Researchers had shown great interest from where politics affects accounting standard-setting process (Pratt 2013). This means casual observation of the standard-setting process suggesting politics and regulatory activities affects setting of accounting standards. In other words, Researchers majorly develops as well as test given economic-based theories of standard setting for capturing the political factors. The main goal relies upon synthesizing empirical research mainly in politics of standard setting at FASB (Financial Accounting Standards Board). This aims at clearly understanding the politics of standard setting for researching on the progress level as far as possible (Dillard and Vinnari 2016). Challenges It has been noticed that there is no one model that aims at fully capturing the complex economic as well as political nature of accounting standard setting. This reveals models provides necessary framework especially for empirical work (Deegan 2013). Researchers faces danger in over fitting the data by interpreting given empirical work for consistent favored model. There are various challenges viewed in relation with fitting the theory as well as empirical work. There is generally good deal of evidence showing the effect of politics especially on standard setting. It reveals considering number of examples both in US as well as on international basis as directly affected by given standard setting outcomes (Bebbington, Unerman and O'Dwyer 2014). These examples make it clear for the politics as playing major role in standard setting. These challenges help in providing larger sample as observed in IAS 39. Risks There have been considerate discussions regarding the proposed new accounting rules for leases. This means at the risk of over-simplification, it considers the current FASB or IASB proposal for capitalizing the lease transactions involving operating leases depicted in the balance sheet. It help neutral observers for bringing improvement in accounting as in case of economic substance in many leases for specified period for asset purchase financed by debt (Pratt 2013). Several efforts have been undertaken for eliminating the alternative accounting treatments for given transaction class. For instance, if an individual believes managers takes consideration regarding the accounting choices for signaling private information, it eliminates with the ability from reporting transactions for reducing informational values. Issues Agenda of standard setters considers as one of the crucial determinant of accounting standards for checking on the accounting issues inclusive of standard setters. In other words, there are some of the controversial accounting issues as addressed by FASB in case of oil and gas accounting. In this case, it was effectively added by FASB agenda in understanding the full cost method accounting rules (Dillard and Vinnari 2016). Therefore, one of the methodological issues reveals restricting the samples from accounting firms lobby from the comment letter process. For Instance, general approach reveals lobbying in two major aspects such as including comment letters in respondent with important standard setting issues. There are various findings found from the factors governing political and regulatory attributes such as commonality among the positions (Deegan 2013). There is no strong coalitions in and among the constituents in aligning with varied process for gaining understanding of substantive issues for underlying standard setting process. Reference List Bebbington, J., Unerman, J. and O'Dwyer, B., 2014. Sustainability accounting and accountability. Routledge. Deegan, C., 2013. Financial accounting theory. McGraw-Hill Education Australia. Dillard, J. and Vinnari, E., 2016. A case study of critique: Critical perspectives on critical accounting. Critical Perspectives on Accounting. Pratt, J., 2013. Financial accounting in an economic context. Wiley Global Education.