Bulletin
2008 / 04 - 3 September 2008
The Financial Reporting Council (FRC) held its 4th meeting in Sydney on 3 September 2008. The principal matters dealt with at the meeting were:
- outcomes of the international financial reporting standards (IFRS) workshop;
- an update from the Chairperson of the Accounting Professional and Ethical Standards Board (APESB);
- the upcoming public sector accounting workshop;
- an update on recent stakeholder meetings; and
- emissions trading.
IFRS workshop
On 11 August 2008, the FRC and G100 jointly sponsored a workshop on the Australian IFRS experience. The workshop was attended by Sir David Tweedie, the Chairman of the International Accounting Standards Board (IASB) and Mr Warren McGregor, IASB Board Member. The workshop considered a report collated by PricewaterhouseCoopers, which was commissioned by the FRC and the G100, which documented the results from a survey of G100 members on their experiences adopting IFRS. The results from the survey provide strong support for a principles based approach to standard setting. The costs and benefits of adopting IFRS are documented in the report. The workshop discussed several specific areas that had been identified by G100 members that required review by the IASB. In all key areas the Chairman of the IASB referred the workshop to the existing work schedule of the IASB indicating that these matters were already under review by the IASB. The report will be released publicly in due course.
Update from the Chair of the APESB
Ms Kate Spargo, the Chairperson for the APESB, provided an overview of the role of the APESB. The APESB's two main functions are setting standards and influencing ethical behaviour. The APESB endeavours to develop standards that are user friendly and leave scope for professional judgment.
Public Sector Accounting Workshop
Mr Tim Youngberry, First Assistant Secretary with the Department of Finance and Deregulation, lead a discussion on public sector accounting issues. The Council has scheduled a workshop with key participants for 5 November 2008.
The FRC discussed key issues of importance for the workshop including transaction neutrality, ex‑post versus ex‑ante reporting, Government Finance Statistics (GFS) reporting requirements and New Zealand's approval to Public Sector Auditing Standards.
Recent stakeholder meetings
The FRC convened a special meeting on 12 August to coincide with Sir David Tweedie's visit to Australia. Sir David outlined that the next twelve months are critical for determining accounting standards for the next decade. Sir David highlighted the issues that are of high priority to the IASB over the next few years including responding to the recommendations of the Financial Stability Forum on Enhancing Market and Institutional Resilience. It was noted that the standards under review included those areas identified by the G100 members (refer to the IFRS workshop above).
At the FRC meeting of 9 September reports were provided on a number of recent meetings with stakeholders and other bodies, including:
- Mr Lucy's meeting with the Minister for Superannuation and Corporate Law;
- Ms Judith Downes's report on the June meeting of the Standards Advisory Council meeting.
Mr Warwick Hunt also provided an overview of developments in New Zealand audit regulation including auditor liability reform and public sector issues.
Emissions trading
The Council noted the importance of ensuring an operable accounting standard for emissions trading by 2010. The Council also noted that this issue was discussed during Sir David Tweedie's recent visit to Australia and assurances were provided which were confirmed in a letter between the Chairman of the FRC to the Chairman of the IASB.
Other matters
The FRC will next meet on 26 November 2008 in Melbourne.
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.