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Running head: Water Accounting Standards Board
 
            Water Accounting Standards Board
 
 
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Water Accounting Standards Board
Introduction
The essay contains the theoretical perspective of the decision that was made by the Commonwealth Government to create a new body called the Water Accounting Standards Board. The theoretical perspective that has been used is the public interest theory of regulation which is used in accounting under regulation of financial accounting. It promotes the interest of the public in the accounting system which was lacking before the creation of the Water Accounting Standards Board. The importance and the effects of regulation in accounting for water have been explained in the essay. The decision of the Commonwealth Government has been explained theoretically. The essay also contains the discussion whether the Water Accounting Standard Board is expected to be effective. The effectiveness of the Board has been discussed and the reason why it is expected to be effective has been discussed in details.
Explanation in a theoretical perspective of the decision made by the Commonwealth Government
The decision of the Commonwealth Government to create a new body by the name of Water Accounting Standards Board was made because they wanted to create a system that regulates financial accounting and reporting. Basing their decisions on theoretical perspective, the aim of the creation of Water Accounting Standard Board was to incorporate the regulation of financial theory in the water sector through the use of public interest theory of regulation. As Water Accounting Standard Board, (2011), puts it, the system that was used before for the accounting of water value and volumes was inconsistent across Australia and there was the need of making it consistent by regulating the system.
The theory that is suitable for the action of the Commonwealth decision in making the Water Accounting Standard Board is public interest theory of regulation. Regulation is a set of designed rules that are used by the authority to govern and to control conducts. In accounting, the regulations that are related to financial accounting are developed by authoritative bodies that are independent and they help in governing the rules that are used in the financial statements preparation called accounting standards. The theory of public interest regulation has had arguments against and for in their existence. The assumption of the theory is that the regulatory body does not rely on self interest in the making of the rules, but it is neutral and it puts the interest of the public first. The regulation of financial accounting in any field helps in developing financial standards that are relied on by the public. The people who prepare the financial reports are the management of a company who are not the owners. The shareholders are the people who own companies and they are supposed to have information about the company. The management is the one that posses more information concerning the company than the stakeholders and the shareholders. This raises the need of regulation of the financial accounting and reporting using the theory of public interest regulation.
The systems that were used before in the accounting for water in Australia were not regulated. The accounting standards in the accounting for water values and regulation of financial accounting will help in improving the environmental, economic and social outcomes in the management of water. Huge losses can be experienced if there are no regulations on the water sector because the sector will be dominated by a few people. The water industry works together with the Water Accounting Standards Board as illustrated by Michael et al, (2007), in the effort to have standards for water accounting that is regulated. The Water Accounting Standard Board is supposed to be an independent board and advise the Meteorology Bureau. The creation of the body by the Commonwealth Government is to regulate the failures such as lack of information, monopolies and externalities by the use of public interest theory. The regulations that will be imposed on the Water sector by the body will be for the public interest and there will be scrutiny in the body by the government or by the media.
The national water account is to be created and it is to use the Australian Water Accounting Standards to account for water. Accounting for water means that the body would take care of the issues that rise in water accounting and it would create the confidence that water is accounted for in the proper way and that the accounting for water is regulated. As stated by Smith, (2010), the process of the water accounting includes, identifying where the water is, quantifying the water that is available, reporting about the water, assuring the public that there is water and the last process is publishing. Publishing gives information about the claims to the water or the rights that are associated with the water. It also gives the full information about the water and the obligations concerning the water. The accounting of water helps in the regulation of financial accounting and the publishing of the information helps in promoting the public interest theory in the water accounting. The Commonwealth Government made the decision of creating a new body because it is committed to achieve the accounting process for the national water accounting which will increase completeness and credibility of the accounting information through public interest theory of the financial accounting. The National water accounting process is expected to meet the needs of water systems in providing the information that is needed to the public and to the stakeholders. The information may be needed for the purpose of planning for the future and estimation of the budgets. The commitment of the common wealth government led to the formation of the Water Accounting Standard Board.  The creation of the body will ensure that the public gets the advantage because of the regulations and the availability of water.
Responsibilities of the Water Accounting Standard Board
The decision of the Commonwealth Government to create the Water Accounting Standard Board was made based on their responsibilities. With the public interest theory of regulation, the board will have guidelines on the standards that are to be used. According to Water Accounting Standards Board, (2009), one of the responsibilities of the Water Accounting Standards Board is to coordinate and to oversee the activities that are made for development in the water sector for the interest of the public. Another responsibility of the Water Accounting Standard Board is to provide advice to the National Water Account Committee and the Bureau of Meteorology from the matters related to the accounting standards of water.
The role of maintaining the Water Accounting Conceptual Framework in the presentation and the preparation of the water accounting reports shows that the decision of the Common wealth Government on the formation of the Water Accounting Standard Board is to use the regulation of accounting in the Water Accounting Conceptual Framework. Another role of the Water Accounting standards Board is to draft and to develop the Australian water accounting standards. This role is grouped together with the responsibility of drafting and developing the assurance standards and auditing in accordance with the agreed development process standards.
The body is also to ensure that the Framework of the Conceptual accounting has exposure and is accessible by the public for adoption which may be voluntary. The Australian Water Accounting standards are to be reviewed and the feedback received before the recommendations of the adoption are made. This will maintain the consistency in the accounting system of water accounting and the assurance of the adoption.
The other important role of the board is to maintain the water accounting discipline and to promote the awareness of the accounting standards. The body seeks to make the public understand water accounting and the work that is developed in relation to water accounting. By fulfilling this role, the board is to produce financial accounting statements that are publicly available and give reliable information concerning the projects. This is possible if the public interest theory is used and it will give protection to the people who are not able to access the statements through the widows and orphan argument in the public interest theory. The board is to join with the Australian Accounting Standard Board, the Auditing and the Assurance Standards Board and the Financial Reporting Council. The aim of liaising is to make sure that the Standards in the Boards and the Australian Water Accounting Standards are in line with financial accounting in Australia. The alignment of the boards will promote regulation of accounting and the report that will be prepared will disclose all the information that is needed and according to the regulations of financial accounting.
Whether the Water Accounting Standard Board will be effective
Based on the theoretical perspective of public interest theory of regulation, the Water Accounting Standard Board will be effective in its work. In financial accounting, the regulations give standards that are used in the preparation of the accounting reports and the standards promote consistency and uniformity of the financial statement and reports. As stated by Malendez, (2009), the formation of the body by the Commonwealth Government will ensure that the standards of accounting for water are laid down. The body will be effective because guidelines are needed and they will promote consistency in water accountability. The public will be protected through the public interest theory and the regulations that will be introduced. The idea of the body is to have accounting standards for water and guidelines well stipulated for the benefit of the public. The Water Accounting standard will be effective in its roles and it will fulfil its mandate because it is independent and neutral as assumed by the public interest theory in the role of advisory. This makes it free to make decisions without being influenced by other boards and so it is likely to make decisions that will help the public and improve water accounting.
The water accounting standard Board will be effective in its operation because it succeeded the Water Accounting Development Committee whose members include accounting experts. It is supported by small staffs that are dedicated and the staffs have the experience that is needed for development and effectiveness. It is likely to succeed because it will take over the work that was being done by the Committee and improve on the work. This will promote regulation of the financial accounting through the public interest theory of the accounting principles and the methods of accounting that will be used by all the specialists who deal with the water accounting issues. The presence of the dedicated staff will help in providing the resources that are required by the board in its operations.
The roles and the responsibilities of the Water Accounting Standard Board that was formed by the Commonwealth Government are well stipulated which gives it a good base for its operations. The board is to take over from the water developments accounting standards and it will promote the public interest it its operation rather than self interest. The members of the Board are likely to succeed in their roles and their duties because there are constant meetings that take place at least four times in a year.
The Water Accounting Standard Board will be agreeing on a work plan and this will form the basis of being funded by BoG. Its effectiveness is also contributed to the membership formation where the members and the Chair will be active for a term of three years. The criterion to be used for the selection of the members and the chair is related to the Water Accounting Standards for Australia. To increase the effectiveness, the members of the board will work for a maximum of twenty days per year.
The members of the Water Accounting Standard Board will be expected to participate in the meetings which will be cost neutral to all the members. For the formal meetings, the members are to be given the sitting allowance and the allowance for preparation of the meetings. This encourages the members and they get active in participation and this makes the board to be effective. With the alliance of the board and the other bodies together with the Council, the Water Accounting standards Board will be effective because it has to fulfil its responsibilities and play its part in the alliance and putting the interest of the public first before their own interests.
Conclusion
The decision of the commonwealth Government of creating the Water Accounting Standards Board was a good decision because the accounting standards will be promoted in Australia and there will be regulation of accounting and reporting in water accounting system. Regulation will help in overseeing the accounts and monitoring of water accounting. Public interest theory of regulation will help in promoting the needs of the public and the disclosure of the financial accounting information. Regulation will promote accountability in water accounting that is necessary to the public.
 
 
 
 
References
Malendez. E. T., (2009), IMPROVING WATER INFORMATION THROUGH STANDARDISED WATER ACCOUNTING: AUSTRALIAN EVIDENCE* p. 1-22
Michael. V, Manfred. L, Stuart. P and Mette. C, (2007), Water accounting in Australia, Academic Journal. Vol. 61 Issue 4, p650-659, 10p
Smith. M. (2010), Australian Water Accounting Standards and the irrigation Industry. P. 1-18.
Water Accounting Standards Board, (2009), Viewed on 21st April 2011. http://www.bom.gov.au/water/about/consultation/document/WASB_TOR.pdf
Water Accounting Standards Board, (2011), Viewed on 21st April 2011. http://www.bom.gov.au/water/about/consultation/wasb.shtml