The Financial Reporting Council (FRC) is the peak body responsible for the broad oversight of the accounting and auditing standards setting processes for the public and private sectors in Australia, monitoring the effectiveness of Australia's auditor independence requirements, and advising the responsible Minister on these matters.
The Council's members are appointed by the Minister on the basis of nominations made by key stakeholders in the business and investing communities, the professional accounting bodies, governments and regulatory agencies. As at 30 June 2009 the Council had 18 members, all of whom had been appointed on a part-time basis.
As part of its role of overseeing the standards setting processes, the FRC's responsibilities include appointing the members (other than the Chairs) of the Australian Accounting Standards Board (AASB) and the Auditing and Assurance Standards Board (AUASB), determining the broad strategic directions of the AASB and AUASB, and giving advice or feedback: to the AASB and AUASB on their priorities, business plans and procedures; and to the Offices of the AASB and AUASB on their budgets and staffing arrangements.
The AASB deals with the setting of accounting standards for the public and private sectors of the Australian economy, while the AUASB focuses on the development and setting of auditing and assurance standards and guidance. Since 1 July 2008, both Boards have been agencies for the purposes of the Financial Management and Accountability Act 1997 (FMA Act) and are preparing separate annual reports for the Minister concerning their operations during 2008-09.
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 planning and performance of quality assurance reviews of audit work undertaken by Australian auditors to the extent to which those reviews related to auditor independence requirements.
In the performance of these functions, the FRC is assisted by a Secretariat which is located at the Treasury.
The FRC meets at least once each quarter to perform its functions associated with the oversight of the standards setting processes and monitoring the effectiveness of the auditor independence requirements.
Funding for the FRC is provided through an Australian Government appropriation.