5.1 Establishment, functions and powers
The FRC is the peak body responsible for overseeing the effectiveness of the financial reporting framework in Australia. Its key functions include: the oversight of the accounting and auditing standards setting processes for the public and private sectors; providing strategic advice in relation to the quality of audits conducted by Australian auditors; and advising the Minister on these and related matters to the extent that they affect the financial reporting framework in Australia.
The FRC monitors the development of international accounting and auditing standards, works to promote the development of a single set of accounting and auditing standards for worldwide use and promotes their adoption.
The FRC operates within a framework set out in Part 12 of the ASIC Act. The ASIC Act sets out core objectives for accounting and auditing standards setting in Australia:
- accounting standards should facilitate the Australian economy by reducing the cost of capital and enabling Australian entities to compete effectively overseas, and should maintain investor confidence in the Australian economy, including its capital markets; and
- accounting and auditing standards should facilitate the Australian economy by being clearly stated and easy to understand.
The ASIC Act expressly limits the FRC's ability to become involved in the technical deliberations of the AASB and AUASB. In particular, it provides that the FRC does not have power to direct the AASB or AUASB in relation to the development, or making, of a particular standard, or to veto a standard formulated or recommended by the AASB or AUASB. This provision is designed to ensure the independence of the standard setting boards.
5.2 Membership and meetings
Under section 235A of the ASIC Act, the members of the FRC are appointed by the Minister on a part-time basis and hold office on terms and conditions determined by the Minister. Most members of the FRC have been appointed on the basis of nominations put forward by key stakeholder groups.
As at 30 June 2015, the FRC had 14 members. During 2014-15, three members ended their terms on the FRC and four members were appointed. A full list of members during 2014-15 and their nominating stakeholders is at Appendix A. The FRC held three meetings during 2014-15.
5.3 Consultants
No consultants were engaged to perform work on behalf of the FRC in 2014-15.
5.4 Communication and consultation
The FRC uses its internet website (www.frc.gov.au) and meetings with stakeholders and other interest groups as its primary means of communication and consultation. Reports of each FRC meeting are published on the website. The website also includes information about FRC members, minutes of past meetings, published reports and procedural rules.
5.5 Finances
In 2014-15, the Australian Government provided funding through the Treasury to support the FRC. The FRC's Secretariat is provided by staff of the Treasury's Markets Group. Expenditures and performance of its functions are included in the Treasury's annual financial statements.
Funding of the AASB and AUASB (including the sources of that funding) is included in the reports of the AASB and AUASB.
5.6 Freedom of information
Since 1 May 2011, agencies subject to the Freedom of Information Act 1982 (FOI Act) have been required to publish information to the public as part of the Information Publication Scheme. This requirement is in Part II of the FOI Act and has replaced the former requirement to publish a section 8 statement in an annual report. All information published by the FRC can be accessed from links on the home page of the FRC's website (www.frc.gov.au).
The FRC did not receive any applications for access to documents under the FOI Act during 2014-15.
5.7 Regulatory impact statements
The FRC did not submit any Regulatory Impact Statements in 2014-15.