Process for the Development and Issuing of Broad Strategic Directions by the FRC

The FRC will ensure that the following guidelines are applied in the development of broad strategic directions issued to the AASB and AUASB (singularly, ‘the Board’) in accordance with the provisions of section 225(2)(c) and section 225(2A)(c) of the Australian Securities and Investments Commission Act 2001:

  1. The FRC may develop and issue new and revised strategic directions taking into account:
    • the Commonwealth Government’s stated policies and priorities;
    • relevant international and domestic considerations impacting on the setting of accounting or auditing standards; and
    • the public interest in the context of the Australian economy.
  2. The FRC will engage, as early as practicable, the relevant Board on any matter that may lead to a revised or new strategic direction.
  3. The FRC will consider whether to form a committee of its members in order to give the matters more detailed consideration than may be possible at regular meetings of the Council. The committee will normally include a representative of the relevant Board and may also include other stakeholders.
  4. Progress reports on the work undertaken by the FRC, including by its committee where applicable, will be shared with the relevant Board and tabled at FRC meetings.
  5. Before a direction is issued by the FRC, the relevant Board will have had adequate opportunity to consider a draft direction and to provide comment on that draft to the FRC.
  6. Before a direction is issued by the FRC, stakeholders will have had adequate opportunity to consider a draft direction and provide comment on that draft to the FRC.
    • Stakeholder groups that can be identified as likely to have an interest in the subject matter will be alerted directly of the opportunity to comment, either by FRC members or the FRC Secretariat. Comments could be in writing or at roundtables or other meetings. Such stakeholders may include, but are not limited to:
      • the professional accounting bodies
      • major and mid-tier accounting firms
      • regulatory bodies
      • peak bodies in both the private and public sectors.
    • Other stakeholders will be able to access the draft direction via the FRC website in order to ensure them the opportunity to provide comment.
  7. The FRC will not issue a new or revised strategic direction without being satisfied that the Board and stakeholder groups:
    • have been given adequate opportunity to comment on a draft direction and related matters;
    • have had their concerns given due consideration in framing the final strategic direction; and
    • have access to sufficient resources to comply with any new requirements imposed under the new or revised strategic direction.
  8. Before issuing a strategic direction, the FRC will seek legal advice as to whether the direction would constitute a ‘legislative instrument’ in accordance with the Legislative Instruments Act 2003. The FRC will also ascertain the need for a Regulation Impact Statement to be prepared.
  9. Following the decision on a strategic direction by the FRC, it will be communicated in writing by a letter from the FRC Chairman to the Chair of the relevant Board.
  10. In implementing a strategic direction, should the Board require guidance or clarification on the intention or requirements of the strategic direction, it should seek this in the first instance from the FRC.