An Introduction to Australia's Financial Reporting Council

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Introduction
The Financial Reporting Council (FRC) is a statutory body under the Australian Securities and Investments Commission (ASIC) Act 2001 and its purpose is to oversee the process of setting accounting & auditing standards. One of the many key roles of FRC includes the maintenance of independence functions of auditor by monitoring and assessing the overall adequacy of the procedures followed by the auditors and their compliance with auditor independence requirements (FRC 2011). It also monitors the effectiveness of the Financial Reporting structure and in light of the possible developments; advising the Ministers and professional accounting bodies by providing reports and other additional measures needed to enhance on those matters. Another key role includes monitoring of the procedures taken by the professional accounting bodies for planning and performing quality assurance reviews of audit work. FRC, whenever necessary, advises or gives feedback to Australian Accounting Standards Board (AASB) on their priorities, proposals, budgets and even appoint members or arrange the structure of members (other than the Chairs). It also has an effective hand in determining the broad strategic directions of AASB (FRC 2011). Moreover, it stretches its hands to monitor the development of single-set of accounting and auditing standards in regards to the international accounting for the best interests of both the private and public sectors in the Australian economy (Bowrey 2007).
1a. Reason for the FRC Decision
On 2005 FRC decided that Australia would adopt as much as it can from International Financial Reporting Standards (IFRS), only to the extent where the culture or other factors would not impede the decision. It brought about a swirl of changes in Australia where accounting standards were unparalleled in Australian financial reporting history. As FRC sets strategic directions for AASB, whole Australian reporting entities were required to prepare the



References: Australian Accounting Standard Board (2010), ‘International convergence and harmonization policy’, viewed on 20 August 2011, http://www.aasb.com.au/admin/file/content102/c3/ACCPS4_4-02.pdf Central Queensland study guide 2010 http://www.iasplus.com/au/0509differences.pdf, (2005), was accessed on 23 August 2011, 11:30 pm Sweeney, J.T. & Roberts, R.W. (1997), “Cognitive moral development and auditor independence”, Accounting, Organizations and Society, Vol. 22, pp. 337-52. (Online Emerald) Turner, D.-M., Haley, H. and Hallencreutz, J. (2009), “Towards a global definition of best practice”, Journal of Knowledge, Culture and Change Management, Vol. 9 No. 8, pp. 186-90, (Online Emerald) http://www.treasury.act.gov.au/accounting/download/IAS_01m.pdf , (2005) was accessed on 23 August 2011, 3 pm Wong, P. (2005), “Transitional arrangements for smaller companies in relation to international financial reporting standards”, Managerial Auditing Journal, Vol. 2, (Online Emerald)

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