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:

Setting auditing, accounting, ethics, public sector and education standards; and
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

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

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

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

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:

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)
the Enacting body(ies)

Commonwealth Parliament of Australia and the Australian Stock Exchange
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

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

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

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

If YES, please indicate the term of appointment:

Year(s)

41. Are joint auditors required for audits of listed entities?

Yes

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

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)

http://scaleplus.law.gov.au

Yes

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.

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.

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

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

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:

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

Public
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.
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)

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

Yes

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.

Professional body established by the profession

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)

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:

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

The Committee responsible for consultations, the Legislation and Standards Committee, have meetings open to members
approval process for final standards (i.e., majority required to approve final standards)

Majority of the Board of Directors
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

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 To become a Professional National Accountant, the educational requirement is completion of an Advanced Diploma in Accounting or an approved University Degree in Accounting and completion of the NIA Professional Education Program (PEP) (which is a Masters in Commerce). The subjects� content required in university courses includes: Basic Accounting, Financial and Corporate Accounting, Accounting Standards and Theory, Cost and Management Accounting, Business Finance, Auditing, Commercial Law, Economics, Statistics, Computer System, Taxation Law and Company Law as well as at least 25 percent of the study in general education (not commerce-related) fields. Because of range of subject choice is University Degrees, these subjects are compulsory choices for students who want to join the professional accounting bodies. These subjects are also found in the curriculum of the Advanced Diploma in Accounting. The Advanced Diploma in Accounting is a more perception course with little subject choice. This content is also supplemented by the content of NIA Professional Education Program which includes: Managing Ethics in Organisation, Strategic Planning and Management, Issues in Auditing and Professional Practices, International Accounting, Issues in Management Accounting, Security Analysis and Portfolio Management, Principles of Taxation Law, Advanced Taxation, Advanced Financial Accounting and Issues in Company Financial Reporting. The NIA Professional Education Program is currently provided by the University New England (UNE) and on completion the university awards the member a Master Degree in Commerce (Professional Accounting).
	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.

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.
How many voting members does the relevant body(ies) have
13,000 NIA members
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:
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

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

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

	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)

www.aasb.com.au

Yes

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.

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).

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

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

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:

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

Public
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
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)

http://scaleplus.law.gov.au

Yes

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.

Statutory (Agency being appointed by government)

Australian Accounting Standards Board (AASB) Standards

Australian Accounting Standards (AASs)

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

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:

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

Public
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
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:

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
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.
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

If YES, please describe the following:

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

Overview only, no specific staff allocated
The consequences of non-compliance with the financial reporting, accounting or auditing requirements.

Referrals to the appropriate regulator and/or suspension of trading
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

If NO, proceed to the next section.

If YES, please describe :

What are the name and duties of the oversight body?

Outlined in Schedule 1, division 1 of CLERP 9 � Section 225 of the ASIC Act (http://www.austlii.edu.au/au)

Specific accounting and auditing standard setting functions for which the Financial Reporting Council (FRC) is responsible include:

- appointing the members of the AASB and AUASB (other than the Chairmen);
- approving and monitoring the AASB�s and AUASB�s: priorities; business plans; budgets; and staffing arrangements (including level, structure and composition of staffing);
- determining the AASB�s and AUASB�s broad strategic directions;
- giving the AASB and AUASB directions, advice or feedback on matters of general policy and on the AASB�s and AUASB�s procedures;
- monitoring the development of international accounting and auditing standards and the accounting and auditing standards that apply in major international financial centres;
- furthering the development of a single set of accounting and auditing standards for world-wide use with appropriate regard to international developments;
- promoting the continued adoption of international best practice accounting and auditing standards in the Australian accounting and auditing standard setting processes if doing so would be in the best interests of both the private and public sectors in the Australian economy;
- monitoring:
the operation of accounting and auditing standards to assess their continued relevance and their effectiveness in achieving their objectives in respect of both the private and public sectors of the Australian economy;
- the effectiveness of the consultative arrangements used by the AASB and AUASB; and
- seeking contributions towards the costs of the Australian accounting and auditing standard setting processes;
- monitoring and periodically reviewing the level of funding, and the funding arrangements, for the AASB and AUASB.

Specific auditor independence functions for which the FRC is responsible include:

- monitoring and assessing the nature and overall adequacy of:
- the systems and processes used by Australian auditors to ensure compliance with auditor independence requirements;
- the systems and processes used by professional accounting bodies for planning and performing quality assurance reviews of audit work undertaken by Australian auditors to the extent to which those reviews relate to auditor independence requirements;
- the action that Australian auditors who have been subject to such quality assurance reviews have taken in response to the reports prepared as a result of those reviews;
- the action taken by professional accounting bodies to ensure that Australian auditors who have been subject to such quality assurance reviews respond appropriately to the reports prepared as a result of those reviews; and
the investigation and disciplinary procedures of professional accounting bodies as those procedures apply to Australian auditors;
- monitoring the overall compliance by companies, registered schemes and disclosing entities with the audit-related disclosure requirements of the Corporations Act and the accounting and auditing standards;
- giving the Minister and the professional accounting bodies reports and advice on the above matters;
- monitoring international developments in auditor independence, assessing the adequacy of the Australian auditor independence requirements in the light of those developments and giving the Minister, and professional accounting bodies, reports and advice on any additional measures needed to enhance the independence of Australian auditors; and
- promoting, and monitoring the adequacy of, the teaching of professional and business ethics by, or on behalf of, professional accounting bodies to the extent to which the teaching of those subjects relates to auditor independence.
The number of members on the oversight body

13
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.
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
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.
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:

regulation of the audit profession

No additional requirements
accounting and auditing standard-setting

No additional requirements
review of financial statements prepared by listed entities

No additional requirements
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:

regulation of the audit profession

No additional requirements
accounting and auditing standard-setting

As per the Corporations Act
review of financial statements prepared by listed entities

As per the Corporations Act
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

regulation of the audit profession

no additional requirements
accounting and auditing standard-setting

As per the Corporations Act
review of financial statements prepared by listed listed entities

As per the Corporations Act
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

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
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
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
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

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?

Yes

If NO, proceed to the Certification of Chief Executive

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)

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)

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