House of Representatives

Explanatory Memorandum

Circulated By the Authority of the Minister for Financial Services, Superannuation, Corporate Law and Human Services, the Hon Chris Bowen

Chapter 8 - FRC functions and funding

Context of amendments

8.1 Prior to the enactment of the Governance Review Implementation (AASB and AUASB) Act 2008 ( GRI Act), the AASB and the AUASB were statutory bodies governed by the CAC Act. The GRI Act has transferred the AASB and the AUASB from the CAC Act to the Financial Management and Accountability Act 1997 ( FMA Act) framework.

8.2 As a consequence of the enactment of the GRI Act, the specific accounting and auditing standards functions given to the Financial Reporting Council (FRC) under paragraphs 225(2)(i) and (j) and 225A(2)(i) and (j) of the ASIC Act are now obsolete and unnecessary. These provisions require the FRC to:

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seek contributions towards the costs of the Australian accounting standard and auditing standard setting processes; and

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monitor the level of funding, and the funding arrangements, for those processes.

Summary of new law

8.3 The Bill repeals paragraphs 225(2)(i) and (j) and 225(2A)(2)(i) and (j) of the ASIC Act.

Comparison of key features of new law and current law

Detailed explanation of new law

8.4 Paragraphs 225(2)(i) and (j) and 225(2A)(2)(i) and(j) of the ASIC Act will be repealed as they are no longer necessary or appropriate having regard to the fact that the AASB and the AUASB are now financial management and accountability agencies for purpose of the FMA Act . [Schedule 2, Part 1, items 9 to 12]