Bulletin
2003/4 - November 2003
The Financial Reporting Council (FRC) met on 5 November 2003. A list of the current FRC membership is attached.
The meeting considered the following main issues.
FRC's comments on the CLERP 9 draft legislation
Report from the second CLERP 9 taskforce meeting
The FRC Chairman advised the meeting that the FRC's CLERP 9 taskforce met on 13 October 2003 to discuss its reaction to the CLERP 9 exposure draft and met again on 24 October to discuss the development of a FRC submission on CLERP 9. The FRC Chairman explained the key discussion points which arose from these meetings.
Members noted the minutes of the 13 October CLERP 9 taskforce meeting and a secretariat paper which updated the meeting on the progress of the CLERP 9 taskforce since the last FRC meeting.
The meeting considered the possibility that a consultant be hired to determine the type of activities that would be required from the FRC to discharge its expanded functions under CLERP 9, the extent to which these activities could be undertaken by consultants and their likely cost. It was agreed that the FRC Chairman and Deputy Chairman would make a recommendation to the FRC, at the 5 December 2003 FRC meeting on a list of independent consultants that could potentially be hired to advise the FRC on this work.
The meeting also discussed the possibility that the structure and composition of the FRC would need to be reviewed in light of the FRC's proposed new functions.
Submission on CLERP 9
The FRC considered the key points raised by the Chairman and a draft FRC submission on CLERP 9 and agreed that the secretariat would redraft the submission to include the following main proposals about the provisions in the draft Bill:
- the FRC's role should be expanded to include oversight of audit quality (including monitoring and assessing the systems in place in the profession in respect of audit quality and auditor independence) rather than being limited to auditor independence;
- the provisions should be framed to facilitate a co-regulatory model in which the FRC performs its functions in conjunction with, but still independent of, the professional accounting bodies (while not detracting from the capacity of the FRC to monitor auditors who are not members of a professional body); and
- the roles and responsibilities of all regulatory and oversight bodies in the area of auditor quality, should be made clear.
The FRC agreed that the FRC Chairman send the submission, on behalf of the FRC, once the secretariat, in consultation with the FRC Chairman and Deputy Chairman, has completed any necessary redrafting after the consideration of any comments, on the draft submission, received from FRC members.
AASB Budget and Business Plan
The FRC approved an increase in the contribution rates to the AASB Superannuation Fund as recommended by the actuary and included in the budget, and to continue with the AASB Superannuation Plan's present 50/50 growth sub-fund/ balanced sub-fund investment split.
The FRC agreed to approve the budget with the condition that notes be added to explain that;
- although it is not reflected in the current budget, a substantial contribution will be made to the IASB during the 2003-04 financial year; and
- some expenses may be subject to change after the appointment of a new full-time AASB Chair, and his/her consideration of priorities for the AASB.
The FRC approved the updated 2003-04 AASB Business Plan.
Report by Acting Chair of the AASB
Report on recent AASB activities
The acting AASB Chair, Ms Ruth Picker, updated the meeting on the substantial progress that the AASB has made and is continuing to make in its preparation towards the 2005 IAS adoption date. The acting AASB Chair advised that the AASB is confident that the International Accounting Standards will be ready for application in Australia by the deadline provided that the IASB is able to keep to its timetable.
The status of copyright
The acting AASB Chair advised that the AASB was still in deliberations with the IASB over issues surrounding the copyright of the Implementation Guidance and Basis for Conclusions of International Accounting Standards. As things presently stand, an agreement has been reached which will allow the standards themselves to be distributed in the same way as other legislative instruments - via the internet or in hardcopy form - without the payment of royalties to the IASB.
The acting AASB Chair also updated the meeting on the AASB's policy regarding options within International Accounting Standards and the status of early adoption given the cross references contained in International accounting standards.
AASB appointment
The FRC unanimously agreed to appoint Mr Bryce Denison to the AASB. (Mr Denison's appointment was formalised on 10 November 2003).
The FRC is the peak body responsible for the broad oversight of the accounting standard setting process for the private and public sectors. It comprises key stakeholders from the business and investing communities, the professional accounting bodies, governments and regulatory agencies.
- Key functions of the FRC are to advise the Government on the accounting standard setting process and the development of international accounting standards, and to determine the broad strategic direction of the standard setter, the Australian Accounting Standards Board.
For further information, please contact the secretariat of the Financial Reporting Council, c/- The Treasury, Langton Crescent, Parkes ACT 2600.
Mr Jorge del Busto
Ph: (02) 6263 3144
Fax: (02) 6263 2770
E-mail:
jdelbusto@frc.gov.au
or visit the FRC's website at www.frc.gov.au.
ATTACHMENT
Members of the Financial Reporting Council
Members:
- Mr Charles Macek, Company Director - FRC Chairman (appointed as Chairman by the Treasurer and nominated as an FRC member by the Securities Institute of Australia);
- Ms Elizabeth Alexander, AM, Adviser to Blake Dawson Waldron - FRC Deputy Chairman (appointed as Deputy Chairman by the FRC and nominated as an FRC member by the Australian Institute of Company Directors);
- Mr Don Challen, Secretary, Tasmanian Department of Treasury and Finance - nominated by Heads of State and Territory Treasuries;
- Ms Karen Hamilton, Executive General Manager, Issuers & Market Integrity, Australian Stock Exchange - nominated by the Stock Exchange;
- Mr David Jackson, Director, Australian Shareholders' Association - nominated by the ASA;
- Mr John Langoulant, Under Treasurer, WA Department of Treasury and Finance;
- Mr Graeme McGregor, AO, Company Director - nominated by CPA Australia;
- Mr Jim Murphy, Executive Director, Markets Group, Department of the Treasury - nominated by the Commonwealth;
- Mr Tom Pockett, Chief Financial Officer, Woolworths Limited - nominated by the Business Council of Australia;
- Mr Greg Pound, Chief Accountant, Australian Securities and Investments Commission - nominated by ASIC;
- Mr Phillip Prior, First Assistant Secretary, Budget Group, Department of Finance and Administration - nominated by the Commonwealth;
- Mr Brian Scullin, Special Adviser to Head of Deutsche Asset Management, Asia-Pacific - nominated by Investment & Financial Services Association (IFSA)
- Mr Ken Spencer, Company Director and Member, Board of Trustees, International Accounting Standards Committee Foundation;
- Mr Lewis Ting, Retired Ernst & Young Partner, Company Director - nominated by The Institute of Chartered Accountants in Australia;
- Ms Catherine Walter, AM, Company Director and Solicitor; Chair of the Business Regulation Advisory Group;
- Mr Klaus Zimmermann, Chief Executive Officer, Eldercare Incorporated and National President, National Institute of Accountants - nominated by the NIA.
Alternate members:
- Mr Roger Cotton, Chief Executive Officer, National Institute of Accountants; alternate member to Mr Klaus Zimmerman - nominated by the NIA;
- Mr Stephen Harrison, AO, Chief Executive Officer, The Institute of Chartered Accountants in Australia; alternate member to Mr Lewis Ting - nominated by ICAA;
- Mr Jim Kerwin, First Assistant Secretary, Commonwealth Financial Reporting Unit, Department of Finance and Administration; alternate member to Mr Phillip Prior - nominated by the Commonwealth;
- Mr Greg Larsen, Chief Executive Officer, CPA Australia; alternate member to Mr Graeme McGregor, AO - nominated by CPA Australia;
- Mr Michael Rawstron, General Manager, Corporate Governance Division, Department of the Treasury; alternate member to Mr Jim Murphy - nominated by the Commonwealth.