The Financial Reporting Council is a statutory body under the ASIC Act. The FRC is responsible for providing broad oversight of the process for setting both accounting and auditing standards, as well as monitoring the effectiveness of auditor independence requirements in Australia and giving the Minister reports and advice on these matters. A summary of the FRC's statutory functions appears in Appendix C.
The FRC operates within a framework set out in Part 12 of the ASIC Act. The Act sets out core objectives for accounting and auditing standards setting in Australia:
- Accounting standards should facilitate the Australian economy by reducing the cost of capital and enabling Australian entities to compete effectively overseas, and should maintain investor confidence in the Australian economy, including its capital markets.
- Accounting and auditing standards should facilitate the Australian economy by being clearly stated and easy to understand.
The ASIC Act expressly limits the FRC's ability to become involved in the technical deliberations of the AASB and AUASB. In particular, it provides that the FRC does not have power to direct the AASB or AUASB in relation to the development, or making, of a particular standard, or to veto a standard formulated or recommended by the AASB or AUASB. This provision is designed to ensure the independence of the standard setters.
Under section 235A of the ASIC Act, the members of the FRC are appointed by the Minister on a part-time basis and hold office on terms and conditions determined by the Minister. Most members of the FRC have been appointed on the basis of nominations put forward by key stakeholder groups.
In accordance with subsection 235A(3) of the ASIC Act, which provides that the FRC may appoint one of its members to be Deputy Chair of the FRC, Mr Michael Coleman was appointed Deputy Chair on 10 June 2009.
As at 30 June 2009, the FRC had 18 members. During 2008-09, four members retired while seven new members were appointed. A full list of members during 2008-09, and the stakeholders who nominated them, is in Appendix A.
Six meetings of the FRC were held during 2008-09.
In November 2008, Ms Judith Downes was engaged to prepare a report on accounting issues emerging from the global financial crisis. The report was presented to the joint IASB/FASB roundtable meeting held in Tokyo on 3 December 2008. Total expenditure during 2008-09 on this contract was $16,371.
The FRC uses its internet website (www.frc.gov.au) and meetings with stakeholders and other interest groups as its primary means of communication and consultation.
The FRC regularly issues bulletins that communicate decisions taken at its meetings and other important developments in accounting and auditing standard setting. These bulletins are available on the FRC website. Other material available on the website includes information about the FRC's members, minutes of past FRC meetings, reports published by the FRC and its procedural rules.
In 2008-09, the Australian Government provided funding totalling $2,421,000 through Treasury for the purposes of the FRC. Expenditure by the FRC out of this appropriation included:
- $1,007,917 of IASCF contributions in 2009;
- $546,658 in staffing costs;
- $82,257 for the FRC Chairman's salary and superannuation;
- $34,276 in sitting fees for FRC members (other than the Chairman), including sitting fees for attendance at committee meetings;
- $16,371 on consultants;
- $182,940 on travel; and
- $71,545 on overheads.
Particulars of the funding for the AASB and AUASB in 2008-09 (including the sources of that funding), which in 2007-08 and earlier years were detailed in the FRC's annual report, are now included in the separate reports of the AASB and AUASB.
The FRC Secretariat, on behalf of the FRC, maintains possession of the following documents:
- FRC meeting agenda papers;
- administrative and technical papers concerning the FRC's functions and its performance in regard to those functions;
- copies of minutes and bulletins issued by the FRC; and
- correspondence between the FRC, stakeholder groups and members of the public.
Requests under the Freedom of Information Act 1982 for access to documents in the possession of the FRC can be directed to the FRC Secretariat at the contact details shown on page 9.
The FRC did not receive any applications for access to documents under the Freedom of Information Act 1982 during 2008-09.
The FRC did not submit any regulatory impact statements in 2008-09.