Compliance Responses and Action Plans

  • Compliance Responses and Action Plans

    IFAC members and associates have provided self-assessment information about the regulatory and standard-setting framework in their countries (Part 1) and their organizations' activities in addressing IFAC's membership requirements (Part 2) as described in the Statements of Membership Obligations. Based on an analysis of this information, they are developing SMO Action Plans for continuous development and improvement.

    Some organizations have qualified to submit SMO Action Plans on a biennial basis by meeting eligibility criteria. These organizations are indicated with an asterisk (*).

    In the interest of transparency and providing information to the profession, regulators, and other stakeholders, all responses and SMO Action Plans are accessible below.

    Institute of Public Accountants

     

    Introduction

    The information below has been submitted as part of the IFAC Member Body Compliance program. The Program has two components:

    Part 1: Assessment of the Regulatory and Standard-Setting Framework (provides information about regulatory requirements and standard-setting processes in member body countries); and
    Part 2: Assessment of Compliance (provides information on compliance by member bodies with the Statements of Membership Obligations). Part 2 of the Compliance Program will begin later this year, and the results will also be posted to the website.

    The responses to Part 1 are provided below. IFAC staff has reviewed the responses and, where necessary, validated them with external knowledgeable parties. A list of key terms is available to assist readers in understanding the responses.

    The purpose of this Part 1 Assessment is to collect information on the roles of IFAC member bodies and other organizations (including government, regulatory or other appointed authorities) with respect to:

    1. Setting auditing, accounting, ethics, public sector and education standards; and
    2. Regulating the accountancy profession.

    Sections 1 and 2 of Part 1 contain an introduction and instructions for member body respondents. For this reason, they are not included here, and the responses begin with Section 3.

    Questions or comments may be sent to complianceassessment@ifac.org.


    Section 3 -- Member Body General Information

    1. Country:

      Australia


    2. Name of member body:
      Institute of Public Accountants

      Or please specify name:



    3. Individual responsible for preparation:
      Gavan Ord


    4. Date member body became a member of IFAC:
      Note: Please enter a numeric date (e.g., 12/2001, Month/Year)

      12 / 2004



    Questions 5 - 22 are for internal use only


    Section 3G -- Affiliations


    23. Please list those regional organizations to which your organization belongs (e.g., FEE, CAPA, ECSAFA, IAA, etc.):
      None



    Section 4 -- Statutory Framework


    Responses to this section will provide a description of the legal framework governing the commercial aspects of auditing and financial reporting in your country.

    Section 4A -- The Companies Act or Commercial Code


    The following questions concern the Companies Act (the Act) or Commercial Code (the Code) or similar Legal authority in your country. If no Legal authority exists, or the Legal authority does not address particular questions, please indicate "N/A" for Not Applicable.

    24. What is the full name of:
      a). the Act or the Code: Corporations Act 2001 (Clth)
      b). the Enacting body: Commonwealth Parliament of Australia
      c). date the Act or Code came into force: 07 / 2001


    25. How can IFAC obtain a copy of the Act or Code?
      It is available from http://scaleplus.law.gov.au


    26. Is the Act or Code available in English?
      Yes   No


    27. What are the types of entities covered by the Act or the Code?
      Please check all that apply.
      Listed entities   Other (please specify): Non-listed disclosing entities
      Private companies   Other (please specify): Registered schemes
      Governmental   Other (please specify):
      Not-for-profit   Other (please specify):


    28. Is there a requirement for the following entities to prepare annual statutory financial statements? If YES, please describe the financial reporting requirements including the accounting standards to be followed.
      Please check all that apply.
        No Yes (If YES, please describe)
      Listed entities Audited financial statement prepared in accordance with Australian Accounting Standards are to be prepared and lodged
      Private companies Large proprietary (private) companies are to prepare and lodge audited financial statements in accordance with Australian Accounting Standards and other private companies that are requested by shareholders or the regulator to prepare and lodge. Large private companies can seek relief from the requirement to prepare and lodge audited financial statements.
      Governmental Audited financial statement in accordance with Australian accounting standards (which generally follow IFRS) are required to be prepared and lodged
      Not-for-profit Audited financial statement in accordance with Australian accounting standards (which generally follow IFRS) are required to be prepared and lodged although an exception exists for small private companies
      Other (please describe) Non-listed entities Audited financial statement in accordance with Australian accounting standards (which generally follow IFRS) are required to be prepared and lodged
      Other (please describe) Registered schemes Audited financial statement in accordance with Australian accounting standards (which generally follow IFRS) are required to be prepared and lodged


    29. Is there a statutory requirement for the following entities to be audited? If YES, describe the requirement including the auditing standards to be followed:
      Please check all that apply.
        No Yes (If YES, please describe)
      Listed entities Listed entities must have their financial statement audited by a registered company auditor. Such audits must be conducted in accordance with Australian auditing standards
      Private companies Only private companies that are required to prepare and lodge financial statements as stated above are required to have such financial statements audited by a registered company auditor in accordance with Australian Auditing Standards. This represents only a small number of private companies in Australia
      Governmental Government owned companies are required to be audited by a registered company auditor, which can include the Auditor General. Such audits must be conducted in accordance with Australian Auditing Standards.
      Not-for-profit Only where a not-for-profit company is incorporated as a public company (limited by guarantee) are they required to be audited by a registered company auditor. Such audits must be conducted in accordance with Australian auditing standards.
      Other (please describe) Non-listed entities All other entities that are required to prepare and lodge financial statements must have such statements audited by a registered company auditor in accordance with Australian auditing standards
      Other (please describe) Non-listed entities


    30. Are the auditors ("statutory auditors") that are appointed for audits required by the Act or Code ("statutory audits") appointed for a specific period?
      Yes   No
      If YES, please indicate the term of appointment: Year(s)


    31. Who appoints the statutory auditors?
      Please check all that apply.
      Shareholders   Management
      Board of directors   Other (please specify):
      Audit committee   Other (please specify):
      Government agency   Other (please specify):


    32. Does the Act or Code require joint auditors for the statutory audit?
      Yes   No
      If yes, please describe the requirement:


    33. Does the Act or Code require the rotation of the auditors or audit firms performing statutory audits?
      Yes   No
      If yes, please describe the requirement:
      For Listed Company Audits for years commencing as of July 1, 2004, the Corporate Law Economic Reform Program (CLERP) 9 amendments require rotation of the Lead Engagement / Signing partner every five years and the Review partner if one is appointed.

      This rotation period can be extended to 7 years for smaller listed entities who have the approval of the regulator.

      Auditors are appointed until removed or resigned; therefore, they are not appointed for a specific period as such. Their appointment can be reviewed annually at the Annual General Meeting of the entity.



    Section 4B -- Securities Market Regulations


    Responses to this section will provide a description of the financial reporting and auditing requirements for listed entities in your country.

    34. What are (a) the major items of Legal authority for such requirements, (b) the Enacting body(ies) and (c) the latest amendment date? Please identify the specific articles or sections that pertain to auditing and financial reporting:
    1. the major items of Legal authority for such requirements

      Corporations Act 2001 (Clth) Australian Stock Exchange listing rules, the Australian Securities and Investments Commission Act 2001 (Clth) and the Australian Prudentail Regulatory Authority Act 2001 (Clth)

    2. the Enacting body(ies)

      Commonwealth Parliament of Australia and the Australian Stock Exchange

    3. the latest amendment date?

      29 June 2004


    35. How can IFAC obtain a copy of the Legal authority?
      http://scaleplus.law.gov.au


    36. Is the Legal authority available in English?
      Yes   No


    37. Are there any additional or alternative financial statement reporting requirements for listed entities that are not described in your answer to Question 28?
      Yes   No
      If YES, please describe the requirement:
      Listed entities that are in the insurance and banking sectors are required to provide additional reports to the relevant regulator. All listed companies are required to report in accordance with Australian Stock Exchange listing rules, which entail some additional reporting and disclosure requirements


    38. Are there any additional auditing requirements that apply to listed entities other than those described in your answer to Question 29 (e.g., additional GAAS requirements, additional independence requirements, requirements to report to those charged with governance, etc.)?
      Yes   No
      If YES, please describe the requirement:
      The independence requirements of the three professional accounting bodies - F1 Professional Independence for the other two bodies and Section 8 Independence of the NIA Code of Ethics. All the independence requirements are based on the IFAC Code of Ethics.

      The CLERP 9 amendments also now require auditors to be independent.


    39. Who appoints the statutory auditors of listed entities?
      Please check all that apply.
      Shareholders   Management
      Board of directors   Other (please specify):
      Audit committee   Other (please specify):
      Government agency   Other (please specify):


    40. Are auditors who perform audits of listed entities appointed for a specified period?
      Yes   No
      If YES, please indicate the term of appointment: Year(s)


    41. Are joint auditors required for audits of listed entities?
      Yes   No
      If YES, please describe the requirement:
      Only one auditor is required, there may be reviewing partners but not joint auditors, as required in France by way of example.


    42. Is rotation of the auditor or audit firm for audits of listed entities required?
      Yes   No
      If YES, please describe the requirement:
      The Corporations Act 2001 (Clth) requires the lead audit partner and the review partner of a listed entity to rotate every five years. This period can be extended to seven years for smaller listed companies with the approval of the regulator



    Section 5 -- Auditing Standards


    Responses to this section will provide a description of the legal and professional framework governing audit and other assurance standards in your country. The section focuses on the establishment of such standards. Please indicate the role your organization plays within this framework.

    Section 5A -- Statutory Framework


    43. Please provide the name of the Legal authority and/or self-regulatory rules that establish audit and other assurance standards in your country, the date of the last amendment of such authority or rules and the name of body responsible for setting audit and other assurance standards. If the standards are different for different entities (e.g., listed entities, private companies, governmental bodies, not-for-profit organizations, etc.), please specify the details that apply to each:
      Type of entity Name of
      applicable
      legal
      authority
      Date of last
      amendment
      (e.g. MM/YYYY 06/2001)
      Name of body responsible
      for setting audit and
      other assurance standards
      Listed entity Corporations Act 2001 (Clth) and the Australian Securities and Investments Commission Act 2001 (Clth) 06/2004 Auditing and Assurance Standards Board
      Other (please describe) All entities required by Corporations Act or where entities require an audit Corporations Act 2001 (Clth) and the Australian Securities and Investments Commission Act 2001 (Clth) 06/2004 Auditing and Assurance Standards Board
      Other (please describe)
      Other (please describe)

      a. How can IFAC obtain copies of these documents?

      http://scaleplus.law.gov.au

      b. Are the documents available in English?
      Yes   No


    Section 5B -- Standard-Setting (Auditing and Assurance Standards Board)


    44. For Auditing and Assurance Standards Board, please indicate the nature of the body (i.e., whether it is part of a government ministry or department, an agency appointed by government, a private organization established by the profession, or other [please describe]) and the name of the standards.
      a. Nature of body

      From 1 July 2004, the AUASB is a statutory body. The Financial Reporting Council exercises a monitoring function over the AUASB.


      The AUASB will be funded in a similar manner to the Australian Accounting Standards Board (AASB) being a mixture of government and Accounting Bodies' funding.


      b. Name of standards

      Auditing and Assurance Standards (AUS) and Auditing and Assurance Guidance Statements (AGS)


    45. How many voting members does the standard-setting body have?
      10


    46. Are the members of the standard-setting body involved on a voluntary basis or employed by the standard-setting body?
      Voluntary  
      Employed  
      Both - Please describe: From 1 July 2004, The CLERP 9 amendments provide for a part time Chairman who is paid (1 day per week anticipated). Members of the Board will receive sitting fees.


    47. What are the criteria considered in selecting members of the standard-setting body (e.g., best person for the job, sector of the profession, private and public members, academic, geographical representation, etc.)?
      All of the examples listed in the questions are criteria considered for selecting members of the AUASB


    48. Who appoints these members (e.g., member body, government, user, regulator, etc.)?
      The Minister responsible (the Treasurer) appoints the Chairman, while all other members are appointed by the Financial Reporting Council


    49. What is the term of appointment for members?
      3 Year(s)


    50. For how many years has the standard-setting body been in existence?
      37 Year(s)


    51. Please indicate the budget in US$ of the standard-setting body for the last fiscal year:
      Note: Please enter a whole number using commas (e.g., 4,000,000)

      560,000

      Please enter the exchange rate used to calculate this number.

      Note: Please enter a decimal amount (e.g., 4.0027)

      0.70



    52. To what entity is the standard-setting body accountable?
      Financial Reporting Council and the Commonwealth Parliament of Australia


    53. Describe the due process followed by the standard-setting body. Please include explanations of the following:
    1. public exposure of standards

      Details of how these standards are developed and issued is included in AUS 102 Foreword to Australian Auditing and Assuracne Standards and Guidance Standards (January 2002). This document is available at www.aarf.asn.au

    2. accessibility of meetings (i.e., public or private)

      Public

    3. approval process for final standards (i.e., majority required to approve final standards)

      Simple majority of the AUASB then as an AUASB standard is now a 'disallowable instrument' of the Parliament, the Standard is place before the Parliament for 15 parliamentary sitting days where the Parliament can move to strike the standard out or amend it. No action by the Parliament means the Standard is passed.

    4. other relevant due process activities

      All standards are exposed for public comment before final consideration by the AUASB


    54. Approximately how many days per year does the standard-setting body meet in full session (including teleconferences)?
      12 Day(s)



    Section 6 -- Ethics


    Responses to questions in this section will provide a description of the legal and professional framework governing ethics standards for accountants in your country. This section focuses on the establishment of such standards. Please indicate the role your organization plays within this framework.

    Section 6A -- Statutory Framework


    55. For each of the following types of professionals, please indicate the name of the Legal authority and/or self-regulatory rules establishing ethics standards for accountants and auditors in your country, the date of the last amendment of such authority or rules and the name of body responsible for setting the ethics standards.
      Type of professional covered Name of
      applicable
      legal
      authority
      Date of last
      amendment
      (e.g. MM/YYYY 06/2001)
      Name of body responsible
      for setting ethics standards
      Professional Accountants in Public Practice NIA Code of Ethics 02/2003 NIA
      Professional Accountants in Business NIA Code of Ethics 02/2003 NIA
      Professional Accountants in the Public Sector NIA Code of Ethics 02/2003 NIA
      Other (please describe)

      a. How can IFAC obtain copies of these documents?

      These documents are available on the NIA web site at www.nia.org.au or see the NIA submission for IFAC full membership

      b. Are the documents available in English?
      Yes   No


    Section 6B -- Standard-Setting (NIA)


    56. For NIA, please indicate the nature of the body (i.e., whether it is part of a government ministry or department, an agency appointed by government, a private organization established by the profession, or other [please describe]) and the name of the standards.
      a. Nature of body

      Professional body established by the profession

      b. Name of standards

      Pronouncement 1 NIA Code of Ethics


    57. How many voting members does the standard-setting body have?
      The NIA Board is vested with the authority to set ethical standards for members and currently the NIA Board has 10 members


    58. Are the members of the standard-setting body involved on a voluntary basis or employed by the standard-setting body?
      Voluntary  
      Employed  
      Both - Please describe: Ethical Standards are developed through a process of consultation between members of the Legislation and Standards Committee of the NIA Board (volunteers), paid technical staff of the NIA and in wider consultation with NIA members and the NIA Board (volunteers)


    59. What are the criteria considered in selecting members of the standard-setting body (e.g., best person for the job, sector of the profession, private and public members, academic, geographical representation, etc.)?
      Not applicable. Members of the Board are selected by Divisional Councils who are in turn elected from the members within that particular division


    60. Who appoints these members (e.g., member body, government, user, regulator, etc.)?
      As in question 59


    61. What is the term of appointment for members?
      2 Year(s)


    62. For how many years has the standard-setting body been in existence?
      81 Year(s)


    63. Please indicate the budget in US$ of the standard-setting body for the last fiscal year:
      Note: Please enter a whole number using commas (e.g., 4,000,000)

      0

      Please enter the exchange rate used to calculate this number.

      Note: Please enter a decimal amount (e.g., 4.0027)

      0.0



    64. To what entity is the standard-setting body accountable?
      The NIA Board is accountable to members through the Annual General Meeting. In addition, the Financial Reporting Council nows has broad oversight over the auditor independence requirements of the NIA, the quality assurance review process as it relates to auditors and the investigation and disciplinary process as it relates to auditors. Other government agencies remain interested in our ethical standards and how effectively they are enforced


    65. Describe the due process followed by the standard-setting body. Please include explanations of the following:
    1. public exposure of standards

      Members are notified by electronic newsletter and hard copy journals. Exposed on the NIA web site for member and public comment.

    2. accessibility of meetings (i.e., public or private)

      The Committee responsible for consultations, the Legislation and Standards Committee, have meetings open to members

    3. approval process for final standards (i.e., majority required to approve final standards)

      Majority of the Board of Directors

    4. other relevant due process activities



    66. Approximately how many days per year does the standard-setting body meet in full session (including teleconferences)?
      7 Day(s)



    Section 7 -- Education


    Responses to questions in this section will provide a description of how education requirements for the profession are established. Please indicate the role your organization plays within this process.

    Section 7A -- Education Requirements


    67. Please describe in general terms the education system in your country including the different stages of education from early childhood education through to tertiary level study. Please indicate which aspects / levels are compulsory as part of the national education system:
      While there are some minor variations in the education system between the various states of Australia, the overall structure is similar. The process is divided into three stages called primary education, secondary education and tertiary education. Primary education is for children from five or six years of age and generally covers seven years schooling. Schooling is generally compulsory to the age of 15. Consequently all of children continue their education into secondary school (high school) with a large proportion continuing though the full six years of secondary education. The final two years of secondary education provide a preparation for entry into tertiary education on employment.

      Tertiary education is divided into two main sectors, the Vocational Education and Training sector and the Higher Education sector. The former sector is delivered by Institutes of Technical and Further Education (TAFE) and the latter by the universities. However in recent years, a closer association has developed between TAFE and universities. This has resulted in the development of articulation pathways from TAFE courses into university courses and in some cases joint programs leading to both TAFE and university awards being conferred. Same TAFE Institutes are now offer limited post-graduate study.

      Entry to tertial education is competitive and is based on academic performance in the final two years of secondary (in High School) education. Students are provided with a tertiary entrance score which is based on their examination results and this is used by TAFE and university admission authorities to allocate students to courses of their choice.


    68. Is there a legal authority or regulation that specifies the requirements for an individual to operate as an accountant or auditor in your country?
      Yes   No

      If YES, please provide the name and describe the requirements, including any relating to education, experience or qualifications.

      There is no legal or educational requirement to use the term "accountant" in Australia. However, there is a stratification of providers of accounting services. The NIA is one of the three professional accounting bodies that set requirements on members to achieve educational standards, obtain experience and adhere to high standards of professional conduct in order to be a member of the NIA, however these requirements are the private requirements of the NIA and are not legally enforceable.

      For Auditors, only auditors of listed entities and entities that are required to prepare and lodge financial statements under the Corporations Act 2001 (Clth) (see prior responses) are required to be registered company auditors under the Corporations Act 2001 (Clth). All other audits, and therefore auditors are largely unregulated.


    69. Please select from below all the relevant key levels of requirements to obtain certification from your member body (i.e. to qualify as a certified or chartered accountant) and provide a general description of the requirement.
      Academic requirements
      Professional examinations
      The professional examinations of the NIA are embodied in the NIA Professional Education Program provided by the University of New England. The NIA relies on the university to conduct the examinations. A joint NIA / UNE Curriculum Oversight Committee meet on a regular basis to monitor the curriculum content and student performance.
      Practical experience
      Associates are admitted on the basis of their educational qualifications. However, to upgrade to Professional National Accountant (PNA) level of membership, Associates must provide documentary evidence of at least three years of mentored experience following the NIA Mentored Experience Program. The NIA has developed the NIA Mentored Experience Program as a comprehensive mentoring program which is compulsory for members who wish to upgrade to PNA status from January 2005.
      Final qualifying examination
      To achieve PNA status, member must complete the NIA Professional Education Program in addition to the NIA Mentored Experience Program. This is a course of studying supplementing and enhancing on their Advanced Diploma in Accounting or approved university Degree in Accounting. Completion of all eight subject and their final examinations is required to meet the educational requirement for PNA status and these together constitute the NIA final professional examination(s).
      Other (please describe)


    70. Which of the following arrangements best describes who establishes the education requirements for the accounting profession in your country? Please select one option.
      A government ministry, department or agency establishes education requirements for the accounting profession with no additional requirements set by the member body(ies).
      A government ministry, department or agency establishes minimum education requirements for the accounting profession, and member body(ies) supplement these requirements.
      Member body(ies) establishes the education requirements for the accounting profession.
      Other (please describe) Accounting is unregulated in Australia


    71. Please provide the name(s) of the relevant body in the government ministry, department, agency and / or member body who establishes the education requirements.
      Accounting in Australia is an unregulated profession. However, the three professional accounting bodies set education standards for entry into their membership. The professional bodies have influenced the Australia universities in regard to the curricula content for Degrees in Accounting. The three bodies also agree in the subject content required in overseas university Degrees which is required for the purposes of migration to Australia. In addition, the NIA has played a significant role in influencing the structure and content of the Advanced Diploma in Accounting.

    1. A general description of the role of the relevant body(ies) including how it operates and its due process in establishing the education requirements.

      In the Australia context, we can only describe the process by which the NIA establishes its own educational requirement for accounting. The NIA is in constant discussion with TAFE Institutes and universities.

      The NIA National Membership Policy Committee periodically reviews the NIA educational requirement for admission. This committee takes into consideration the requirements of the other two Australia professional accounting bodies, statements by government regulatory authorities, the opinion of accounting academics, the view of NIA members, the interests of the general public and the evolution of accounting theory and development of issues (such as international accounting standards) when setting educational requirements. The NIA also places considerately importance on the education statements and relevant discussion papers issued by IFAC from time to time.

    2. How many voting members does the relevant body(ies) have

      13,000 NIA members

    3. Are the members of the relevant body(ies) involved on a voluntary basis or employed by the standard-setting body?
      Voluntary  
      Employed  
      Both - Please describe:

    4. For how many years has the body been in existence?

      40 Year(s)


    72. How would you describe the authority that the education requirements have?
      Requirements are legally-based
      Requirements are set in the constitution, by-laws or other rules of the relevant body(ies).
      Requirements are set in member body(ies) policy document(s).
      Other (please describe)

    72 a. How can IFAC obtain copies of these documents?
      On request

    72 b. Are these documents available in English?
      Yes   No


    73. Are the education requirements for accountants and auditors the same throughout your country, or do they differ among regions, provinces or states?
      Same   Different
      If different, please briefly describe the main differences:


    74. Please indicate the scenario that best describes who delivers the education and examination process for members of the profession. Please only select one option.
      The education program and final examination are delivered by the member body.
      The education program and final examination are delivered by the member body and other education institutions (e.g., universities, colleges, and others).
      The education program and final examination are delivered by education institutions (e.g., universities, colleges, and others).
      Other (please explain)


    75. Once qualified as a member of your professional body, can members offer their services directly to the public?
      Yes   No



    Section 7B -- Licensing


    76. Are there licensing requirements for auditors in your country?
      Yes (continue with Question 77)   No (proceed to Section 8)


    77. Who sets the requirements to obtain a license?
      The Australian Securities and Investments Commission, however as stated previously, apart from auditors of companies required to prepare and lodged financial statements under the Corporations Act 2001 (Clth) (being listed companies and large private compnaies mainly), auditors are mostly unregulated and therefore do not need to have a licence.


    78. What are the requirements to obtain a license (please select all relevant requirements.)?
      Academic study specific for obtaining a license
      Practical experience
      Licensing examination
      Final qualifying examination
      Other (please describe)
      The basic requirement to be a registered company auditor is to have a degree in accounting (which includes an auditing unit), complete a recognised post-graduate unit in auditing and have at least 2,500 hours relevant audit experience in the past 5 years. Please note, membership of a professional body is not a requirement. Please see section 1280 of the Corporations Act 2001 (Clth)


    79. Are there ongoing requirements to retain a license?
      Yes   No

      If YES, please select all relevant requirements.
      Continuing professional development
      Re-examination
      Other (please specify): The auditor is required to lodge an annual statement providing details of audits conducted in the preceding year to demonstrate maintaining competence


    80. What entity grants the license?
      Australian Securities and Investments Commission


    81. Describe any additional licensing requirements for auditors of listed entities (e.g., additional education requirements, registration, etc.).
      None



    Section 8 -- Public Sector Accounting Standards


    Responses to this section will provide a description of the legal and professional framework governing public sector accounting standards in your country. The section focuses on the establishment of such standards. Please indicate, where appropriate, the role of your organization within this framework.

    Section 8A -- Statutory Framework


    82. Please provide the name of the Legal authority and/or self-regulatory rules establishing public sector accounting standards in your country, the date of last amendment and the name of the body responsible for setting public sector accounting standards. If the standards are different for different entities (e.g., whole of government, ministry/department, statutory authority/agency, profit entity owned by government, state governments, local governments, other [please specify]), please specify the details that apply to each.
      Type of entity Name of
      legal
      authority
      Date of last
      amendment
      (e.g. MM/YYYY 06/2001)
      Name of body responsible
      for setting public sector
      accounting standards
      Whole of government Corporations Act 2001 (Clth) and various State and Commonwealth Financial Management Acts 06/2004 Australian Accounting Standards Board
      Ministry/department
      Statutory authority/agency
      Profit entity owned by government
      State governments
      Local governments
      Other (please describe)
      Other (please describe)

      a. How can IFAC obtain copies of these documents?

      www.aasb.com.au

      b. Are the documents available in English?
      Yes   No


    Section 8B -- Standard-Setting (Australian Accounting Standards Board)


    83. For Australian Accounting Standards Board, please indicate the nature of the body (i.e., whether it is part of a government ministry or department, an agency appointed by government, a private organization established by the profession, or other [please describe]) and the name of the standards.
      a. Nature of body

      Statutory

      (Note: With respect to Q89, the AASB has been in existence for 3 years in its current format and 30 years in its previous format).


      b. Name of standards

      Australian Accounting Standards Board (AASB standards). The standards are on the accruals basis.


    84. How many voting members does the standard-setting body have?
      10


    85. Are the members of the standard-setting body involved on a voluntary basis or employed by the standard-setting body?
      Voluntary  
      Employed  
      Both - Please describe: The Chairman is full-time paid employee while the other Board members are paid on a per diem basis


    86. What are the criteria considered in selecting members of the standard-setting body (e.g., best person for the job, sector of the profession, private and public members, academic, geographical representation, etc.)?
      All of the criteria identified in the question are criteria for selection


    87. Who appoints these members (e.g., member body, government, user, regulator, etc.)?
      The Financial Reporting Council appoints all the members except the Chairman, who is appointed by the Minister (Treasurer).

      Note: With respect to question 88, the Chairman is appointed for 5 years.


    88. What is the term of appointment for members?
      3 Year(s)


    89. For how many years has the standard-setting body been in existence?
      30 Year(s)


    90. Please indicate the budget in US$ of the standard-setting body for the last fiscal year:
      Note: Please enter a whole number using commas (e.g., 4,000,000)

      2,000,000

      Please enter the exchange rate used to calculate this number.

      Note: Please enter a decimal amount (e.g., 4.0027)

      0.70



    91. To what entity is the standard-setting body accountable?
      The Financial Reporting Council and the Commonwealth Parliament of Australia


    92. Describe the due process followed by the standard-setting body. Please include explanations of the following:
    1. public exposure of standards

      The AASB follows due process when issuing new standards,. For appropriate issues there may be other consultative documents such as an invitation to comment. Details of the workings of the AASB are contained in Policy Statement 1 at www.aasb.com.au

    2. accessibility of meetings (i.e., public or private)

      Public

    3. approval process for final standards (i.e., majority required to approve final standards)

      7 positive vote out of its current membership of 11. Following that, as the standard is a diallowable instrument of the Parliament, the standard sits before the Commonwealth Parliament for 15 sitting days where it can be struck out or amended. If the Parliament makes no changes within 15 sitting days, the standard is passed

    4. other relevant due process activities

      none


    93. Approximately how many days per year does the standard-setting body meet in full session (including teleconferences)?
      20 Day(s)



    Section 9 -- Private Sector Accounting Standards


    Responses to the questions in this section will provide a description of the legal, statutory and professional framework governing private-sector accounting standards in your country. The section focuses on the establishment of such standards. Please indicate what role your organization plays within this framework.

    Section 9A -- Statutory Framework


    94. Please provide the name of the Legal authority and/or self-regulatory rules that establish private-sector accounting standards in your country, the date of last amendment, and the name of the body responsible for setting private sector accounting standards. If the standards are different for different entities (for example, listed entities, private companies, governmental organization, not for profit organizations, etc.), please specify the requirements that apply to each.
      Type of entity Name of legal
      authority or
      applicable
      rules
      Date of last
      amendment
      (e.g. MM/YYYY 06/2001)
      Name of body responsible
      for setting private sector
      accounting standards
      Listed entity Corporations Act 2001 (Clth) and the Australian Securities and Investments Commission Act 2001 (Clth) 06/2004 Australian Accounting Standards Board
      Other (please describe) Other entities required to prepare financial statements Corporations Act 2001 (Clth) and the Australian Securities and Investments Commission Act 2001 (Clth) 06/2004 Australian Accounting Standards Board
      Other (please describe)
      Other (please describe)
      Other (please describe)

      a. How can IFAC obtain copies of these documents?

      http://scaleplus.law.gov.au

      b. Are the documents available in English?
      Yes   No


    Section 9B -- Standard-Setting (Australian Accounting Standards Board)


    95. For Australian Accounting Standards Board, please indicate the nature of the body (i.e., whether it is part of a government ministry or department, an agency appointed by government, a private organization established by the profession, or other [please describe]) and the name of the standards.
      a. Nature of body

      Statutory (Agency being appointed by government)

      b. Name of standards

      Australian Accounting Standards Board (AASB) Standards

      Australian Accounting Standards (AASs)


    96. How many voting members does the standard-setting body have?
      10


    97. Are the members of the standard-setting body involved on a voluntary basis or employed by the standard-setting body?
      Voluntary  
      Employed  
      Both - Please describe: The Chairman of the AASB is a full time chairman while the other members of the Board are paid on a per diem basis


    98. What are the criteria considered in selecting members of the standard-setting body (e.g., best person for the job, sector of the profession, private and public members, academic, geographical representation, etc.)?
      All of the criteria identified in the question are criteria used for selecting members of the AASB


    99. Who appoints these members (e.g., member body, government, user, regulator, etc.)?
      The Financial Reporting Council appoints all members except the Chairman, who is appointed by the relevant Minister (Treasurer)


    100. What is the term of appointment for members?
      3 Year(s)


    101. For how many years has the standard-setting body been in existence?
      20 Year(s)


    102. Please indicate the budget in US$ of the standard-setting body for the last fiscal year:
      Note: Please enter a whole number using commas (e.g., 4,000,000)

      2,000,000

      Please enter the exchange rate used to calculate this number.

      Note: Please enter a decimal amount (e.g., 4.0027)

      0.70



    103. To what entity is the standard-setting body accountable?
      Financial Reporting Council and the Commonwealth Parliament of Australia


    104. Describe the due process followed by the standard-setting body. Please include explanations of the following:
    1. public exposure of standards

      The AASB follows due process when issuing new standards by first issuing exposure drafts. For appropriate issues there may also be other consultative documents such as an invitation to comment. Details of the workings of the AASB are contained in Policy Statement 1, which can be found at aasb.com.au

    2. accessibility of meetings (i.e., public or private)

      Public

    3. approval process for final standards (i.e., majority required to approve final standards)

      7 positive vote out of its current membership of 11. Following that, as the standard is a diallowable instrument of the Parliament, the standard sits before the Commonwealth Parliament for 15 sitting days where it can be struck out or amended. If the Parliament makes no changes within 15 sitting days, the standard is passed

    4. other relevant due process activities

      None


    105. Approximately how many days per year does the standard-setting body meet in full session (including teleconferences)?
      20 Day(s)



    Section 10 -- Monitoring (Quality Assurance) and Enforcement


    Responses to the questions in this section will provide a description of the legal and professional framework governing regulation of the profession in your country. Please indicate what role your organization plays within this framework.

    Section 10A -- Securities Market Regulatory Authority


    106. Name the authority that regulates the securities market:
      Australian Securities and Investments Commission.
      (See http://www.asic.gov.au/asic/asic.nsf)


    107. What responsibilities does this organization have for monitoring and enforcing compliance with accounting, reporting or auditing requirements? Please identify the Legal authority that establishes that responsibility:
      Responsible for enforcing and regulating company and financial services to protect consumers, investors and creditors. Authority is derived under the Corporations Act 2001 (Clth) and the Australian Securities and Investments Commission Act 2001 (Clth)


    108. Briefly describe the role of the regulatory authority as it relates to the following:
    1. regulation of the audit profession

      Registers company auditors before they can audit under the Corporations Act 2001 (Clth). Monitors activities of auditors via targetted compliance work and can refer company auditors to the Company Auditors and Liquidators Disciplinary Board. Also monitors compliance of auditors with auditing standards

    2. accounting and auditing standard-setting

      Although not part of the standard setting bodies, the Australian Securities and Investments Commission has a direct role in the implementation and interpretation of accounting standards.

    3. review of financial statements prepared by listed entities, and monitoring of their compliance with the accounting and disclosure requirements

      ASIC conducts reviews of accounts in accordance with its procedures and accounting standards. The compliance program varies from year to year



    Section 10B -- Stock Exchange


    109. Name the four largest stock exchangers (by market capitalization) and whether it is organized as a profit or not-for-profit organization:
      Profit Not
      for
      profit
      Stock Exchange
      Australian Stock Exchange (ASX)



    Section 10B -- Stock Exchange
    Australian Stock Exchange (ASX) Details


    110. For Australian Stock Exchange (ASX), is there a mechanism at the stock exchange(s) for monitoring and enforcing financial reporting, accounting and auditing of listed entities?
      Yes   No

      If YES, please describe the following:

    1. How the monitoring and enforcement of financial reporting, accounting and auditing is conducted.

      Overview only, no specific staff allocated

    2. The consequences of non-compliance with the financial reporting, accounting or auditing requirements.

      Referrals to the appropriate regulator and/or suspension of trading

    3. How enforcement actions are administered.

      According the the Corporations Act 2001 (Clth)



    Section 10C -- Regulatory Oversight of the Accounting Profession


    111. Has an audit profession oversight body been established (e.g., to oversee the external quality assurance review process, etc.)?
      Yes   No

      If NO, proceed to the next section.

      If YES, please describe :

    1. What are the name and duties of the oversight body?



    2. The number of members on the oversight body

      13

    3. Its powers

      As well as any other powers conferred by the Australian Securities and Investments Commission Act 2001 (Clth), the FRC has power to do all things necessary or convenient to be done for or in connection with the performance of its functions.

      The FRC may establish committees and advisory groups.

      Restriction on powers

      - The FRC does not have power to direct the AASB in relation to the development, or making, of a particular standard.

      - The FRC does not have power to veto a standard made, formulated or recommended by the AASB.

      - The FRC does not have power to direct the AUASB in relation to the development, or making, of a particular auditing standard.

      - The FRC does not have power to veto a standard made, formulated or recommended by the AUASB.

      In addition to the above the FRC has the following information gathering powers to assist it in its duties under the Australian Securities and Investments Commission Act 2001 (Clth):

      - The Chair of the FRC, acting on behalf of the FRC, may give a professional accounting body a written notice requiring the body to give the FRC:

      (a) a copy of:

      (i) a code of professional conduct of the body; or
      (ii) a proposed code of professional conduct of the body; or
      (iii) a proposed amendment of a code of professional conduct of the body; or
      (b) information about the body's planning or performance of quality assurance reviews; or
      (c) details of the body's investigation or disciplinary procedures.

      - The notice may require the body to give this information to the FRC only to the extent to which the information relates to audit work done by Australian auditors.

      - The Chair of the FRC, acting on behalf of the FRC, may give an Australian auditor a written notice requiring the auditor to give the FRC information about, or documents or copies of documents that relate to, one or more of the following:

      (a) one or more audits conducted by the auditor or in which the auditor participated;
      (b) the measures the auditor adopted, or the procedures the auditor put in place, to ensure that the auditor was, and continues to be, independent of entities it audits;
      (c) any other matter prescribed by the regulations for the purposes of this paragraph.

      Without limiting this, the documents may be audit working papers.


      - such a notice served on a professional accounting body or an Australian auditor must specify:

      (a) the information or documents the professional accounting body or Australian auditor must give; and
      (b) the period within which the body or auditor must give the information or documents.


    4. How the oversight body conducts or oversees a program of inspections to assess the degree of compliance of each audit firm/auditor with applicable auditing standards and regulations

      The power to oversee a program of inspections of auditors/audit firms began on 1 July 2004, therefore the FRC is still developing these processes

    5. The sanctions the oversight body may impose in the event of non-compliance

      In the event of non-compliance, the FRC can impose under the Australian Securities and Investments Commission Act 2001 the following penalties:

      A person commits an offence if:

      (a) the Chair of the FRC gives a professional accounting body or an Australian auditor a notice ; and
      (b) the professional accounting body or the Australian auditor does not comply with the notice then a penalty of up to 10 penalty units (AU$1,100) can be imposed.

      This is a strict liability offence.
      - A person commits an offence if:

      (a) the Chair of the FRC gives a firm a notice; and
      (b) the person is a member of the firm when the notice is given; and
      (c) the notice is not complied with.

      A penalty of up to 10 penalty units (AU$1,100) can be imposed.

      This is a strict liability offence.


    6. How the oversight body is accountable to any public institution or body

      The FRC reports to the Minister and reports to the Commonwealth Parliament of Australia


    Section 10D -- Banks Regulatory Authority


    112. Name the authority that regulates the banks and similar financial institutions. Discuss how this authority differentiates between accounting requirements for regulatory reporting and general purpose external financial reporting:
      Australian Prudentail Regulation Authority and the Reserve Bank of Australia


    113. Discuss briefly the legal requirements with respect to monitoring and enforcement by the regulatory authority of accounting and auditing standards that apply to the banks and similar financial institutions:
      Subject to regulation by the Australian Securities and Investments Commission


    114. Briefly describe the role of the regulatory authority as it relates to the following:
    1. regulation of the audit profession

      No additional requirements

    2. accounting and auditing standard-setting

      No additional requirements

    3. review of financial statements prepared by listed entities

      No additional requirements

    4. enforcement of accounting, reporting and auditing requirements

      No additional requirements



    Section 10E -- Non-Banking Financial Institutions Regulatory Authority


    115. Name the regulatory authority(ies) responsible for monitoring compliance with and enforcing accounting, reporting and auditing requirements imposed on non-banking institutions.
      Australian Prudential Regulation Authority and the Reserve Bank of Australia


    116. What is the source of Legal authority of the regulatory authority(ies)?
      Australian Prudential Regulation Authority Act 2001 (Clth) and the Reserve Bank of Australia Act (Clth)


    117. Briefly describe the role of the regulatory authority(ies) as it relates to the following:
    1. regulation of the audit profession

      No additional requirements

    2. accounting and auditing standard-setting

      As per the Corporations Act

    3. review of financial statements prepared by listed entities

      As per the Corporations Act

    4. enforcement of accounting, reporting and auditing requirements

      As per the Corporations Act



    Section 10F -- Insurance Companies Regulatory Authority


    118. Name the regulatory authority responsible for monitoring compliance with and enforcing accounting, reporting and auditing requirements imposed on insurance companies.
      Australian Prudential Regulation Authority


    119. What is the source of Legal authority of the regulatory authority(ies)?
      Australian Prudential Regulation Authority Act 2001 (Clth) and various other State and Commonwealth acts


    120. Briefly describe the role of the regulatory authority(ies) as it relates to the following
    1. regulation of the audit profession

      no additional requirements

    2. accounting and auditing standard-setting

      As per the Corporations Act

    3. review of financial statements prepared by listed listed entities

      As per the Corporations Act

    4. enforcement of accounting, reporting and auditing requirements

      As per the Corporations Act



    Section 10G -- Other Regulatory Authority


    121. Name any other regulatory authority(ies) responsible for monitoring compliance with and enforcing accounting, reporting and auditing requirements.
      Australian Taxation Office
      Australian Securities and Investments Commission
      Although not regulatory authorities, the three professional accounting bodies have a role in monitoring compliance with and enforcing accounting, reporting and auditing requirements on members


    122. What is the source of Legal authority of each regulatory authority?
      Australian Taxation Office - the Tax Administration Act 1953 (Clth)
      Australian Securities and Investments Commission Act 2001 (Clth)
      Professional Bodies - the Constitution of each body


    123. Briefly describe the role of the regulatory authority(ies) as it relates to the following
    1. regulation of the audit profession

      The professional bodies administers its own ethical rules and quality reviews of its members in public practice, including auditing.
      The Australian Securities and Investments Commission has an extensive compliance program to review the audit profession as it relates to audits of reporting entities.
      The Australian Taxation Office has no role


    2. accounting and auditing standard-setting

      The professional bodies each contribute money and technical 'know-how' to the setting of accounting and auditing standards.
      The Australian Securities and Investments Commission have a direct interest in the setting of standards and their interpretation.
      The Australian Taxation Office has no role


    3. review of financial statements prepared by listed listed entities

      The Australian Securities and Investments Commission has an extensive compliance program to review the financial statements of listed entities to test compliance with accounting standards.
      The Australian Taxation Office reviews the financial statements of listed entities for taxation purposes.
      The professional bodies only role in reviewing the financial statements is for educational purposes


    4. enforcement of accounting, reporting and auditing requirements

      The Australian Securities and Investments Commission has the legal responsibility for enforcing compliance with accounting, auditing and reporting requirements.
      The professional bodies have a professional responsibility to review compliance, however only the Australian Securities and Investments Commission has the legal authority to enforce compliance.
      The Australian Taxation Office has no enforcement responsibility



    Section 10H -- Quality Assurance


    124. Does any organization of professional accountants/auditors organize a program of quality assurance review to monitor compliance with accounting, reporting and auditing requirements?
      Yes   No

      If NO, proceed to next Section.

      If YES, briefly describe the monitoring and enforcement mechanism.

      The professional bodies, including the NIA conduct regular reviews of all practitioners holding public practice certificates. The NIA program is a quality assurance program that reviews members who audit listed entities every 3 years and all other members every 5 years



    125. Under what authority does the organization conduct the program of quality assurance review?
      The NIA conducts its review program under the authority granted in NIA Pronouncement No. 4 Quality Assurance Reviews


    126. Who performs the review (e.g., one firm reviewing another firm, staff from the national professional organization, contractors, or a combination of these)?
      Reviews are performed by a combination of appropriately trained senior staff and accredited accountants who are recently retired as practitioners (the NIA does not use current practitioners).



    Section 10 I -- Investigation and Discipline


    127. Is there a process for investigating and disciplining the accounting profession in your country?

    128. Which of the following best describes the responsibility for the investigatory and disciplinary function in your country?
      Government or other agencies are solely responsible for this function.
      Government or other agencies have this responsibility, but the member body or bodies participate in the process.
      Government formally delegates this function to the member body or bodies, to exercise on its behalf.
      Member body or bodies have separate and independent processes that operate alongside processes of legal authorities.
      Other (please explain) Company Auditors & Liquidators Disciplinary Board


    129. Please indicate the name of the body or bodies responsible for investigation and discipline.
      The NIA, the ICAA and CPA Australia each have their own investigation and discipline process.
      The Australian Securities and Investments Commission can also investigate and seek disciplinary action against auditors through the Company Auditors and Liquidators Disciplinary Board and accountants in the Courts



    Responses to the remaining questions in this Section are required if your organization has responsibility for investigation and disciplinary actions.

    130. How many voting members does the body have?
      Not applicable


    131. Are the members of the body involved on a voluntary basis or employed by the standard-setting body?
      Voluntary  
      Employed  
      Both - Please describe: The Investigation process is carried out by paid staff however the discipline process is carried out by independent volunteers


    132. What are the criteria considered in selecting members of the body (e.g., best person for the job, sector of the profession, private and public members, academic, geographical representation, etc.)?
      Appointments to the Investigation process are based on who has the appropriate skills and expertise in investigation. For the Disciplinary Tribunal, the NIA seeks a balance between representatives of the profession and lay people who have appropriate skills and expertise in disciplinary matters


    133. Who appoints these members (e.g., member body, government, user, regulator, etc.)?
      The NIA Board of Directors


    134. What is the term of appointment for members?
      2 Year(s)


    135. For how many years has the body been in existence?
      40 Year(s)


    136. Please indicate the budget in US$ of the body for the last fiscal year.
      Note: Please enter a whole number using commas (e.g., 4,000,000)

      0

      Please enter the exchange rate used to calculate this number.

      Note: Please enter a decimal amount (e.g., 4.0027)

      (specify currency)



    137. To what entity is the body accountable?
      The disciplinary tribunal is created under the NIA Constitution and therefore does not report to any body, however the Financial Reporting Council does have oversight of the investigation and discipline process as it relates to auditors


    138. Approximately how many days per year does the body meet in full session (including teleconferences)?
      5 Day(s)



     

     

    Disclaimer

    The information contained within the Part 1 Assessment of the Regulatory and Standard-Setting Framework Questionnaires, Part 2 SMO Self-Assessment Questionnaires, and Part 3 SMO Action Plans are based entirely on information provided to IFAC by the IFAC member or associate to which the information relates. Further, the information has been collected by IFAC for the exclusive use and benefit of IFAC and IFAC's members and associates, but is being made available through this website to the general public in the interest of transparency of the IFAC Member Body Compliance Program. While certain efforts are made to validate the information, IFAC undertakes no obligation to confirm or investigate the completeness or accuracy of any of the content of the questionnaire or action plan, now or at any time in the future. Persons accessing the questionnaire or action plan assume full responsibility for the use of the information set forth herein. IFAC does not make any express or implied warranties or representations whatsoever as to any information provided through the questionnaire or action plan, including, without limitation, that the information contained herein will be error-free. IFAC shall not be liable for any damages, including, without limitation, direct, indirect, incidental, special, punitive or consequential damages, that result in any way from your use or reliance on information provided in the questionnaire or action plan. If you need to rely on the information set forth herein for any purpose, you are urged to confirm the information set forth herein with other sources.

    * Indicates organizations that qualify to submit SMO Action Plans biennially

  •  
 

Important Note: Please read our website Terms of Use.

ALL RIGHTS ARE RESERVED. You may not reproduce, store or transmit in any form or by any means, electronic or otherwise, including photocopying, recording, or storage in any type of reference or information retrieval system, nor may you translate, modify or create derivative works or adaptations based on the text of any file, or any part thereof, without the prior written permission of the International Federation of Accountants (IFAC). Please direct permission requests to permissions@ifac.org. See also Permissions Information.