Commonwealth Consolidated Acts Commonwealth Consolidated ActsFunctions generally
(1) The FRC functions are:
(a) to provide broad oversight of the processes for setting in Australia:
(i) accounting standards; and
(ii) auditing standards; and
(iii) sustainability standards; and
(d) to give the Minister reports and advice about the matters referred to in paragraph (a); and
(e) the functions specified in the following subsections:
(i) subsection (1A) (standards functions);
(ii) subsection (2) (AASB governance functions);
(iii) subsection (2A) (AUASB governance functions);
(iv) subsection (2B) (auditor quality functions); and
(f) to establish appropriate consultative mechanisms; and
(g) to advance and promote the main objects of this Part; and
(h) any other functions that the Minister confers on the FRC by written notice to the FRC Chair.
Note: The FRC was established by subsection 225(1) of the Australian Securities and Investments Commission Act 1989 and is continued in existence by section 261 of this Act.
Standards functions
(1A) The FRC functions include:
(a) monitoring the development of international accounting standards, international auditing standards and international sustainability standards; and
(b) monitoring the development of the accounting standards, auditing standards, and sustainability standards that apply in major international financial centres; and
(c) furthering the development of a single set of each of the following for world - wide use with appropriate regard to international developments:
(i) accounting standards;
(ii) auditing standards;
(iii) sustainability standards; and
(d) promoting the continued adoption of international best practice:
(i) accounting standards; and
(ii) auditing standards; and
(iii) sustainability standards;
in the Australian standard - setting processes if doing so would be in the best interests of both the private and public sectors in the Australian economy; and
(e) monitoring the operation of:
(i) accounting standards; and
(ii) auditing standards; and
(iii) sustainability 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; and
(f) monitoring the effectiveness of the consultative arrangements used by the AASB and the AUASB.
AASB governance functions
(2) The FRC functions include:
(a) appointing the members of the AASB (other than the Chair); and
(b) giving the AASB advice or feedback on the AASB's:
(i) priorities; and
(ii) business plans; and
(iii) procedures; and
(ba) giving the Office of the AASB advice or feedback on the Office's:
(i) budgets; and
(ii) staffing arrangements (including level, structure and composition of staffing); and
(c) determining the AASB's broad strategic direction.
AUASB governance functions
(2A) The FRC functions include:
(a) appointing the members of the AUASB (other than the Chair); and
(b) giving the AUASB advice or feedback on the AUASB's:
(i) priorities; and
(ii) business plans; and
(iii) procedures; and
(ba) giving the Office of the AUASB advice or feedback on the Office's:
(i) budgets; and
(ii) staffing arrangements (including level, structure and composition of staffing); and
(c) determining the AUASB's broad strategic direction.
Specific auditor quality functions
(2B) The FRC functions include giving strategic policy advice and reports, to the Minister and professional accounting bodies, in relation to the quality of audits conducted by Australian auditors.
(2C) Without limiting subsection (2B), the FRC functions also include giving strategic policy advice and reports, to the Minister and professional accounting bodies, in relation to any of the following:
(a) the systems and processes used by Australian auditors to comply with:
(i) the provisions of the Corporations Act dealing with the conduct of audits; and
(ii) the auditing standards; and
(iii) applicable codes of professional conduct;
(b) the systems and processes used by professional accounting bodies for planning and performing quality assurance reviews of audit work undertaken by Australian auditors;
(c) 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;
(d) 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;
(e) the investigation and disciplinary procedures of professional accounting bodies as those procedures apply to Australian auditors;
(f) the adequacy of:
(i) the provisions of the Corporations Act dealing with the conduct of audits; and
(ii) the auditing standards; and
(iii) applicable codes of professional conduct;
in light of international developments in relation to audit quality;
(g) 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 audit quality.
(2D) A report under subsection (2B) or (2C) is not a legislative instrument.
Powers
(3) As well as any other powers conferred by this Act, the FRC has power to do all things necessary or convenient to be done for or in connection with the performance of its functions.
(4) Without limiting subsection (3), the FRC may establish committees and advisory groups.
Restriction on powers
(5) The FRC does not have power to direct the AASB in relation to the development, or making, of a particular standard.
(6) The FRC does not have power to veto a standard made, formulated or recommended by the AASB.
(7) The FRC does not have power to direct the AUASB in relation to the development, or making, of a particular auditing standard.
(8) The FRC does not have power to veto a standard made, formulated or recommended by the AUASB.