To facilitate the performance of the auditor independence functions, the FRC has:
- established an Audit Independence Committee to deal with day to day matters associated with the performance of the function;
- signed MOUs with the professional accounting bodies, ASIC, ASX and APRA (MOU bodies); and
- met with the MOU bodies and selected accounting firms.
Audit Independence Committee
The Audit Independence Committee held five meetings during 2007-08.
Members of the Committee during the year were:
- Ms Elizabeth Alexander AM (Chairman to 31 October 2007);
- Mr John Gethin Jones;
- Mr David Jackson (to 19 March 2008);
- Mr Jeffrey Lucy AM (from 11 December 2007);
- Mr Charles Macek (to 10 December 2007);
- Mr Jim Murphy (from 9 April 2008); and
- Ms Catherine Walter AM (Chairman from 7 December 2007).
The Committee's Charter provides that the Committee will assist the FRC by:
- making recommendations to the FRC concerning the engagement of a person, or persons, to assist the FRC in the performance of the functions conferred on it under subsection 225(2B) of the ASIC Act (the auditor independence consultant);
- performing, either alone or in conjunction with the auditor independence consultant, the work needed to ensure the FRC meets the obligations imposed on it by subsection 225(2B) of the ASIC Act;
- making recommendations to the FRC Chairman concerning the notices that should be given by the Chairman pursuant to section 225A of the ASIC Act; and
- preparing, for the consideration of the FRC, a draft of the report the FRC is required to prepare under section 235BA of the ASIC Act.
Memoranda of understanding
The FRC has MOUs with the three professional accounting bodies (CPA Australia, the ICAA and the NIA), ASX, APRA and ASIC in order to facilitate the efficient exchange of information between the MOU bodies and the FRC.
In addition, the FRC has a letter of understanding with CALDB concerning the exchange of information.
Meetings with MOU bodies and audit firms
For the 2007-08 year, meetings were held with the APRA, ASIC, CPA Australia, the ICAA and the NIA. In addition, meetings were also held with the AQRB, CALDB, the Big Four audit firms and a number of firms in the group immediately below the Big Four.
Auditor independence consultant
In December 2004, Mr William J Bartlett was engaged to assist the FRC in the performance of its auditor independence functions. Mr Bartlett's contract concluded on 20 December 2007.