This study investigates the responses by superannuation funds to the impending provisions of AAS25 - Financial Reporting by Superannuation Plans. The Standard mandates the accounting formats and methods to be used by superannuation plans as from June 30, 1992. However early compliance with the provisions of the Standard has been encouraged by the standard setters since its issue on August 29, 1990. Therefore, this study seeks to explain and predict, in a positive accounting framework, the attributes of those funds which are likely to be early compliers with the provisions of the Standard and those which are likely late compliers or non-compliers.
Contrary to expectations, stemming from the reported controversy over the issue of AAS25, early compliance with its provisions appears to be high. Investigations reveal that the legal duties and liabilities imposed on trustees are likely reasons for a high level of compliance. Analysis of the lobbying behaviour of the various interested parties shows that the provisions of the Standard were not as highly controversial as some members of the Superannuation Industry would like to suggest. Therefore, the actual findings of the study are consistent with positive accounting theory.
The study contributes to the existing literature by being the first empirical study which addresses reporting issues of AAS25. It therefore extends the theory to a legal entity not previously studied, namely, to superannuation trust funds. The study also highlights the need to examine the environmental setting, since there may be other factors which lead to predictions in the opposite direction to those inferred from previous studies, conducted at other times and in other areas.