Financial Reporting Council
Australian Accounting Standards Board
Auditing and Assurance Standards Board
Annual Reports
2007-08
© Commonwealth of Australia 2008
ISBN 978-0-642-74478-4
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Chairman: Email: |
Secretariat: Telephone: Facsimile: Email: |
8 October 2008
Senator the Hon Nick Sherry
Minister for Superannuation and Corporate Law
Parliament House
CANBERRA ACT 2600
Dear Minister
I have pleasure in presenting the annual reports of the Financial Reporting Council (FRC), the Australian Accounting Standards Board (AASB) and the Auditing and Assurance Standards Board (AUASB) for the year ended 30 June 2008.
The report by the FRC on its auditor independence functions for 2007-08 is being issued under separate cover.
The reports have been prepared in accordance with section 235B of the Australian Securities and Investments Commission Act 2001 (ASIC Act), and section 9 of the Commonwealth Authorities and Companies Act 1997 (CAC Act), which applied to both the AASB and the AUASB for 2007-08.
Subsection 235B(1) of the ASIC Act requires the FRC, by 31 October each year, to prepare a report on its operations and those of the AASB and the AUASB during the year, and on the achievement of the objects of Part 12 of the ASIC Act relating to accounting and auditing standards. Under subsection 235B(4) of the ASIC Act, the report must be tabled in each House of the Parliament as soon as practicable.
Subsection 9(1) of the CAC Act requires the directors of the AASB and the AUASB to each prepare, by no later than 15 October, an annual report for the past financial year which includes a report of operations, financial statements and the Auditor-General's report on those financial statements. Under subsection 9(3) of the CAC Act, these reports must be tabled in each House of the Parliament as soon as practicable.
Yours sincerely
SIGNED
Jeffrey Lucy AM
Chairman
Abbreviations
The following abbreviations are used throughout this report:
- AASB
- Australian Accounting Standards Board
- AEIFRS
- Australian Equivalents to International Financial Reporting Standards
- AGS
- Auditing Guidance Statements
- A-IFRS
- Australian International Financial Reporting Standards
- APESB
- Accounting Professional and Ethical Standards Board
- APRA
- Australian Prudential Regulatory Authority
- AQRB
- Audit Quality Review Board
- ASA
- Australian Auditing Standard
- ASAE
- Australian Standards on Assurance Engagements
- ASIC
- Australian Securities and Investments Commission
- ASIC Act
- Australian Securities and Investments Commission Act 2001
- ASRB
- Accounting Standards Review Board — New Zealand
- ASRE
- Australian Standards on Review Engagements
- ASRS
- Australian Standards on Related Services
- ASX
- Australian Stock Exchange
- AuASB
- Auditing and Assurance Standards Board (to 30 June 2004)
- AUASB
- Auditing and Assurance Standards Board (as reconstituted on 1 July 2004).
- CAC Act
- Commonwealth Authorities and Companies Act 1997
- CALDB
- Companies Auditors and Liquidators Disciplinary Board
- CDS
- Commonwealth Disability Strategy
- CLERP
- Corporate Law Economic Reform Program
- CLERP 9 Act
- Corporate Law Economic Reform Program (Audit Reform and Corporate Disclosure) Act 2004
- EFRAG
- European Financial Reporting Advisory Group
- FMA Act
- Financial Management and Accountability Act 1997
- FRC
- Financial Reporting Council
- FRLI
- Federal Register of Legislative Instruments
- FRSB
- Financial Reporting Standards Board — New Zealand
- FSF
- Financial Stability Forum
- GAAP
- Generally Accepted Accounting Principles
- GFS
- Government Finance Statistics
- GGS
- General Government Sector
- GST
- Goods and Services Tax
- HOTARAC
- Heads of Treasuries Accounting and Reporting Advisory Committee
- IAASB
- International Auditing and Assurance Standards Board
- IAS
- International Accounting Standards
- IASB
- International Accounting Standards Board
- IASCF
- International Accounting Standards Committee Foundation
- ICAA
- The Institute of Chartered Accountants in Australia
- IFRIC
- International Financial Reporting Interpretations Committee
- IFRS
- International Financial Reporting Standards
- IPSASB
- International Public Sector Accounting Standards Board
- ISA
- International Standard on Auditing
- MOU
- Memorandum of Understanding
- NIA
- National Institute of Accountants
- NSS
- National Standard Setters
- PCAOB
- Public Company Accounting Oversight Board
- RIS
- Regulation Impact Statement
- SAC
- Standards Advisory Council (of the IASB)
- SMEs
- Small and Medium Enterprises
- TTAASAG
- Trans-Tasman Accounting and Auditing Standards Advisory Group
- UIG
- Urgent Issues Group
Introduction
The Financial Reporting Council (FRC) is responsible for overseeing the accounting and auditing standards setting arrangements in Australia, monitoring the effectiveness of Australia's auditor independence requirements, and advising the Minister on these matters.
The Council's 15 members have the dual role of being FRC members as well as directors of the Australian Accounting Standards Board (AASB) and Auditing and Assurance Standards Board (AUASB). Consequently, they are tasked with appointing Board members (other than the Chairman), approving and monitoring priorities, business plans, budgets and staffing arrangements and setting the strategic directions for the FRC, AASB and AUASB. The Council is assisted by the Secretariat, which is located at the Treasury.
The AASB deals with standard setting in the private and public sectors and has its own research and administrative staff. The AUASB focuses on the development and making of Australian Auditing Standards (ASAs).
Under the auditor independence function, the FRC is responsible for monitoring the systems and processes used by Australian auditors to ensure their compliance with auditor independence requirements. The FRC also monitors the professional accounting bodies for planning and performing quality assurance reviews of audit work undertaken by Australian auditors to the extent to which those reviews related to auditor independence requirements.
The FRC meets quarterly to consider and monitor the strategic direction of the three entities. To assist it in the performance of its functions, the FRC has established three standing committees:
- the Finance Committee;
- the Audit Independence Committee; and
- the Nominations Committee.
The FRC, AASB and AUASB are currently funded by different sources, which include Australian Government appropriation, funding from the professional accounting bodies, Australian Securities Exchange and State and Territory governments.