Bulletin
2007 / 03 – 1 June 2007
The 41st meeting of the Financial Reporting Council (FRC) was held in Sydney on 1 June 2007. A list of the current FRC membership is attached (Attachment A).
The main issues considered at the meeting were:
- financial matters;
- update on work of Committees;
- peer review of Board Members; and
- reports from Chair of the Standard Boards.
Financial matters
The FRC considered a range of issues raised by the Finance Committee. Key decisions by the FRC included:
- approving the budgets and business plan for 2007‑08 for the FRC, AASB and AUASB;
- agreeing to transfer to the AUASB in June 2007 approximately $300,000 from the projected surplus funds in the 2006-07 FRC budget, with the final amount to be determined by the FRC Chairman;
- agreeing to undertake a funding review of the FRC, AASB and the AUASB budgets with a medium term focus, as background to the 2008-09 Budget and the preparation of the Compliance Report to the Finance Minister by 15 October 2007;
- agreeing that the AASB will provide in June 2007 an additional contribution of $200,000 to the International Accounting Standards Committee Foundation; and
- noting the draft timetable and responsibilities for the preparation of the 2006‑07 FRC, AASB and AUASB annual reports.
Update on Work of Committees
A progress report on the consultancy being undertaken by Richard Boele from the Banarra Trust was given to the FRC. The consultant noted that he had completed its first stage of research and had commenced liaising in more detail with the audit firms. Members agreed that clarification should be provided to the audit firms on the relationship of the consultancy with the FRC’s functions on Auditor Independence and the nature of its expected output.
The FRC agreed that the 2006-07 Report of Auditor Independence should be presented to the Minister as a separate document and the final consultancy report by The Allan Consulting Group be included with the independence report.
Peer review of Board Members
The FRC agreed that the 2007 peer assessment review of FRC, AASB and AUASB be undertaken, using the survey/evaluation forms recommended by the Nominations Committee, which include a new rating scale.
The FRC Secretariat will distribute, collect the completed forms and inform FRC members of the results of the surveys at the next FRC meeting on 5 September 2007.
Reports by the Chairs of the Standards Boards
Professor David Boymal (the Chairman of the AASB) informed the FRC that the AASB had arrived at its tentative decisions regarding the potential application of the IASB’s SME standard in Australia and had issued its corresponding Invitation to Comment following its Board meeting on 23-25 May 2007. Professor Boymal also advised the FRC that the AASB had recently issued an Exposure Draft (ED) for Financial Reporting by Whole of Government, and that the ED on the review of AAS 27, 29 & 31 on public sector accounting was about to be issued.
The FRC endorsed the AUASB’s intended course of action in relation to it’s follow up on the topic of Auditing Small and Medium Sized Entities (SMEs).
Other matters
The FRC Chairman, Mr Charles Macek provided feedback on his recent overseas trip to Europe and North America, in which he met with different counterparts to discuss key issues on financial reporting.
The FRC agreed that Sydney should be the venue for the 2008 Ken Spencer memorial lecture, and lecture venues be alternated between Sydney and Melbourne going forward.
At the conclusion of the formal agenda, the FRC participated in a discussion with Tom Honan, National President of G100.
The FRC is the peak body responsible for the broad oversight of the accounting and auditing standard setting process for the private and public sectors, as well as monitoring the effectiveness of auditor independence requirements in Australia. It comprises key stakeholders from the business and investing communities, the professional accounting bodies, governments and regulatory agencies. The FRC advises the Government on the accounting and auditing standard setting process and on the development of international accounting and auditing standards. It determines the broad strategic direction of the standard setters, the Australian Accounting Standards Board and the Auditing and Assurance Standards Board.
For further information, please contact the Secretary 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 A
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 — nominated by the Commonwealth);
- Mr Bruce Brook, Company Director, Melbourne, Victoria — nominated by the Business Council of Australia;
- Ms Kathryn Campbell, Deputy Secretary, Financial Management Group, Department of Finance and Administration — nominated by the Commonwealth;
- Mr Don Challen, Secretary, Tasmanian Department of Treasury and Finance — nominated by Heads of State and Territory Treasuries;
- Mr Michael Coleman, Partner, KPMG — nominated by the Australian Institute of Company Directors;
- Mr Mark Coughlin, Development Manager, Origin Energy — nominated by CPA Australia;
- Mr John Gethin-Jones, General Manager, Queensland Investment Corporation — nominated by Investment & Financial Services Association;
- Mr Richard Humphry, AO, Trustee, International Accounting Standards Committee Foundation;
- Mr Warwick Hunt, Chairman, Accounting Standards Review Board of New Zealand — nominated by the New Zealand Minister of Finance;
- Mr David Jackson, Member, Australian Shareholders’ Association — nominated by the Australian Shareholders’ Association;
- Mr Eric Mayne, Chief Supervision Officer, Australian Securities Exchange — nominated by the Australian Securities Exchange;
- Mr Jim Murphy, Executive Director, Markets Group, Department of the Treasury — nominated by the Commonwealth;
- Mr John Stanhope, Chief Financial Officer and Group Managing Director, Finance and Administration, Telstra Corporation Limited — nominated by the Group of 100 Inc;
- Ms Catherine Walter, AM, Company Director and Solicitor; Chair of the Business Regulation Advisory Group — nominated by the Commonwealth;
- Ms Jan West, Partner, Deloitte Touche Tohmatsu — nominated by The Institute of Chartered Accountants in Australia;
- Mr Lee White, Chief Accountant, Australian Securities and Investments Commission — nominated by ASIC;
- Mr Klaus Zimmermann, Chief Executive Officer, Eldercare Incorporated and Director, National Institute of Accountants — nominated by the NIA.