Financial Reporting Council (FRC)
The FRC is a statutory body that has appointment capacity, provides broad strategic direction and budgetary oversight to the AASB. Members of the FRC have business, legal, government and academic interests.
The current membership includes representatives from the Business Council of Australia, the G 100, the Australian Shareholders Association, the Institute of Chartered Accountants, the Australian Prudential Regulatory Authority, the Australian Securities Exchange, the New Zealand Government, the Australian Institute of Company Directors and the Australian State and Federal Government.
The FRC appoints members to the AASB.
Provides broad oversight of the Australian Accounting Standard setting process by giving the AASB broad strategic direction.
Is responsible for relevant and effective accounting standards for Australia.
Directs AASB to adopt international best practise in standard setting.
Maintains budget for AASB.
Australian Accounting Standards Board (AASB)
The AASB is an independent accounting standards organisation that is committed to developing a single set of high-quality understandable Accounting Standards with international compatibility, requiring transparent and comparable information in General Purpose Financial Reports. The Board compromises of 13 members including the chairman who is appointed by the Australian Government. The other board members are appointed by the FRC. The current members include representatives from major accounting partnerships in Australia.
To develop a conceptual framework for the purpose of evaluating proposed accounting standards and international standards.
To develop and issue standards for the Purpose of the Corporations Act 2001.
Participate in the development of internationally applicable Accounting Standards. There are approximately 40 Accounting Standards.
These help those who prepare reports to produce and present specific financial issues in the reports. The Standards are often reviewed and revised regularly to represent constantly emerging debates related to changing political and economic understandings of the best way to report information to stakeholders.
These are groups that attempt to influence the standard setting process by making submissions to the standard setters with reference to standards that are relevant to their industry or interest.
These groups includes:
Group 100: This is an association of the chief financial managers from Australia's 100 largest companies. The group is very active in making submissions to the standard setters. Group of 100's agenda for lobbying the standard setters may be in the general public interest (exp. to ensure that financial statements provide useful information), or they may be more narrowly focused on the interests of the companies for which they work.
Australian Shareholders Association
Australian Securities and Investment Commission (ASIC)
ASIC is an independent government body and is Australia's corporate, markets and financial services regulator. This body was set up under the Australian Securities and Investment Commission Act 2001, and carriers out work under Corporations Act 2001. ASIC role is to administer Corporations Law and is assigned by the Federal Government with the primary regulatory role for both listed and unlisted companies.
ASIC contributes to Australia's economic reputation and wellbeing by ensuring that Australia's financial markets are transparent and supported by confident and informed investors and consumers. AASB sets the Accounting Standards and ASIC enforces them. ASIC interprets Accounting Standards where it is necessary and issues these interpretations through the medium of Accounting Practise notes.
Australian Securities Exchange Ltd (ASX)
The ASX is a public company that provides a marketplace for the buying and selling of shares in public companies and other financial services. The ASX's role only extends to the public companies that are listed on the stock exchange.
The ASX's main concern concern in relation to the preparation and presentation of accounting reports is with the presentation and disclosure of financial information by public listed companies - aims to ensure that all companies listed on the stock exchange act in a manner which is at all times in the best interests of the shareholders and the general public.
The ASX has the following characteristics:
Has Listing Rules - which specify the form, content and frequency of published financial statements for public companies. If companies do not comply with these Listing Rules, they are likely to be de-listed so that their shares can no longer be traded on the stock exchange, or suspended until compliance has occurred.
Constantly provides updates on information about listed companies readily accessible to the public. Constant disclosure assists investors to determine investment decisions.
International Accounting Standards Board (IASB)
Although not integral to this course, the IASB cooperates with the national accounting standard setters to achieve congruence in accounting standards around the world. The IASB is supported by numerous national accounting standard setting interests, with the goal to provide the world's integrating capital markets with a common language for financial reporting.