The Effect of IFRS Reduced Disclosure Reporting Regime on the Australian Public Sector

In the UK there is the Financial Reporting Standards for Smaller Entities (FRSSE) with discussions occurring around the International Financial Reporting Standards (IFRS) for Small Medium Enterprises (SMEs); in NZ there is the Exempt Company Scheme and the Framework for Differential Reporting; and in Australia there have been various attempts at reducing the complexity of IFRS, including the Australian Accounting Standards Board (AASB) Exposure Draft 192 Revised Differential Reporting Frameworks and now the Reduced Disclosure Regime (RDR). The regime was developed for implementation as an alternative to the International Accounting Standards Board’s (IASB) IFRS for SmallMedium-Enterprises (SMEs). RDR is an example of a situation that because it relates to the public sector, would be almost too complex one would think for standard setters to do any sort of impact analysis prior to its implementation. Hence, this is a chance to present a unique look at the type of analysis that had it been undertaken by the AASB prior to adoption it may have resulted in a different
outcome. This paper fills the gap in the current public sector literature by providing an indepth look at the new reduced disclosure requirements and considers the potential benefits of the due process outlined in the EFRAG (2011) discussion paper. Couched within a modified New Public Management (NPM) / agency theory framework the research concludes that the RDR is just another layer of reporting for the already over-reporting public sector.