Bulletin
2008 / 06 - 26 November 2008
The Financial Reporting Council (FRC) held its 49th meeting in Melbourne on 26 November 2008. The principal matters dealt with at the meeting were:
- an update on recent international and stakeholder meetings;
- outcomes of the Public Sector accounting workshop; and
- appointments to the AASB and AUASB.
Recent international and stakeholder meetings
The FRC Chairman, Mr Jeffrey Lucy AM, briefed the meeting on his visit to Beijing and Tokyo during October. In Beijing, Mr Lucy attended a meeting of the International Accounting Standards Committee (IASC) Foundation Trustees and a conference IFRS in Asia 2008 arranged by accounting firm PricewaterhouseCoopers. In Tokyo, Mr Lucy met with representatives of a number of regulatory and professional organisations, including the Accounting Standards Board of Japan, Certified Public Accountants and Auditing Oversight Board, Financial Accounting Standards Foundation, Financial Services Agency, Japanese Institute of Certified Public Accountants and the Tokyo Stock Exchange.
In speaking to his report, Mr Lucy made a range of observations including that:
- two conferences about IFRS will be held in the region during the first half of 2009: a regional policy forum in China in March and a PricewaterhouseCoopers conference in Tokyo in April;
- Japan is likely to adopt IFRS from 2011;
- China is now compliant with IFRS in all bus two areas, although proposed amendments to the related party disclosures standard is expected to eliminate one of the areas of difference; and
- the regional IFRS group covering China, Korea and Japan would be expanded to include Malaysia, India, Hong Kong, Australia and New Zealand.
At the FRC meeting of 26 November, reports were provided on a number of recent meetings with stakeholders and other bodies, including:
- Ms Ruth Picker's report on the November meeting of the International Financial Reporting Interpretations Committee; and
- Ms Judith Downes's report on the November meeting of the Standards Advisory Council meeting and the London roundtable meeting on the global financial crisis arranged by the IASB and the Financial Accounting Standards Board.
The FRC also noted that work in preparation for the joint IASB/Financial Accounting Standards Board Tokyo roundtable on the global financial crisis was being undertaken on behalf of the FRC by Ms Downes. A separate Bulletin about this work is on the FRC website (http://www.frc.gov.au/bulletins/2008/05.asp ).
Public Sector Accounting Workshop
A Public Sector Accounting Workshop, which was arranged by the FRC, was held in Canberra on 5 November 2008. The workshop consisted of discussion of the issues raised by a number of papers on public sector accounting prepared by the Department of Finance and Deregulation, the Australian Accounting Standards Board (AASB) and the FRC Secretariat.
Workshop participants agreed on a number of high level messages, including the need for one set of Australian accounting standards and one Australian standard setter. There was no enthusiasm among workshop participants for moving to either a 'two Boards' or a 'committees' model of standard setting.
The Workshop participants were also of the view that there should be a review of AASB 1049 Whole of Government and General Government Sector Financial Reporting to address implementation and other issues associated with the standard.
Appointments to AASB and AUASB
The FRC approved recommendations from its Nominations Committee concerning appointments and re-appointments to the AASB and the Auditing and Assurance Standards Board (AUASB) during 2009.
An announcement about the successful candidates to be appointed to the Boards will be made shortly.
Other matters
Mr Lucy informed the meeting that the FRC has entered into a new Memorandum of Understanding (MOU) with the Australian Prudential Regulation Authority (APRA). The new MOU provides that APRA will report to the FRC, at least annually, on matters relating to auditor independence. The MOU also provides that APRA will report to the FRC on compliance with APRA's reporting requirements that are relevant to the FRC's functions, if and when such matters arise.
The FRC resolved to acknowledge the significant contributions Mr Warwick Hunt (whose term ended in September 2008) and Mr Lee White (who will be leaving the FRC in early 2009) have made to the work of the Council during their respective terms of office.
The FRC will next meet on Tuesday, 17 February 2009, 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.