Bulletin
2008 / 02 - 9 April 2008
The Financial Reporting Council (FRC) held its second meeting for 2008 in Melbourne on 9 April 2008. The principal matters dealt with at the meeting were:
- an update on XBRL
- an update on recent international stakeholder meetings;
- a discussion paper on the role of the auditor in relation to the preparation of a prospectus for an audit client
- a possible post-implementation review of the adoption of IFRS in Australia ; and
- reports from standards setters and committees.
An update on XBRL
The FRC received a report from the Chairman on the relationship between the Standard Business Reporting (SBR) Project and the adoption of XBRL.
It was noted that a key issue for the Council is the timetable for the adoption of XBRL for ASIC lodgements
The FRC will seek more information from the Manager of the SBR Project as to its intentions and timetable.
XBRL is included on the active work programs of the AASB and the AUASB. It was also noted that this is an issue that TTAASAG may also want to consider further.
Update on Recent Stakeholder Meetings
Reports were provided on a number of recent meetings with stakeholders and other bodies, including:
- Mr Lucy’s visit to the US and Europe during March to meet with representatives of the PCAOB, SEC, European Commission, the Financial Stability Forum, the Financial Services Authority the UK FRC, the UK Accounting Standards Board and EFRAG; and
- Ms Judith Downes’ report on the February meeting of the Standards Advisory Council meeting.
Ms Judith Downes also provided an update on the views of the International Banking Federation of the use of fair value as proposed by the International Accounting Standards Board.
Discussion paper on auditor involvement in due diligence committee arrangements
A key audit independence issue considered by the FRC was the perceived incompatibility between the Australian due diligence committee arrangements and the US interpretation of the application of their auditor independence requirements. The FRC will raise this with the Australian Professional and Ethical Standards Board, seeking an indication of whether this is an issue that the Standards Board would like to further explore.
Possible post-implementation review of IFRS in Australia
It was suggested that the FRC host a workshop with the IASB and G100 invitees, to discuss issues surrounding a possible post-implementation review of the adoption of IFRS in Australia. A review has been proposed by the G100. It is hoped that the workshop can be timed to coincide with Sir David Tweedie’s visit to Australia in August. The focus of the workshop would be on implementation issues rather than technical issues.
Reports from standards setters and committees
The FRC received reports from the respective Chairs of the AASB, AUASB, FRC Finance Committee, FRC Nominations Committee and FRC Audit Independence Committee. A report was also received from the Chairman of the Trans-Tasman Accounting and Auditing Standards Advisory Group (TTAASAG).
Issues addressed in, or arising from, these reports included:
- an update on key issues considered by TTAASAG at its March meeting;
- the business plans of the AASB, AUASB and the FRC;
- the finances of the AASB and the AUASB, and the implications of them becoming FMA Act entities.
Other matters
- The FRC will next meet on 11 June 2008 in Canberra.
About the FRC
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. A list of the current FRC membership is on the FRC’s website.
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.