This essay discusses a number of issues regarding accounting standards and compliance with them. Information was collected various accounting related textbooks and journals. The essay firstly summarizes the purpose of the accounting surveillance program undertaken by ASIC. Then it explains how accounting standards can deal with four types of issues, namely; overstatement of the carrying value of assets, inappropriate deferring of assets as expenses, write-off of expenses to retained earnings, and premature recognition of revenues. Finally the idea that compliance with accounting standards does not necessarily coincide with good corporate governance is explored.
             GIVE A BRIEF SUMMARY OF THE PURPOSE OF THE ACCOUNTING SURVEILLANCE PROGRAM UNDERTAKEN BY THE AUSTRALIAN SECURITIES AND INVESTMENT COMMISSION (ASIC).
             The purpose the accounting surveillance program is to ensure that accounting standards are being met by reporting firms. They found the most cost efficient way to monitor firms was to have a focused and targeted surveillance program based on intelligence and complaints and to work closely with the preparers and users of financial statements. (ASIC, 1998)
             Previously they used to monitor random clients but they found this to be to labor costly and after august of 1998 they decided to monitor in high risk and high complaint firms. (ASIC 1998)
             In the year 2005, they also announced that they were introducing Australian equivalents of international accounting standards (AIFRS) when conducting its financial reporting surveillance. This allows the firms to be compared with international firms based on the same standards. This surveillance program means that the bigger firms had to put a lot of consideration into the preparation of their reports. And was particularity focused on capitalization of expenses, non consolidation of controlled entities and the non recognition of revenue, this is due to them experiencing problems with t...