Legal framework for AUASB appointments
The appointment of members of the Auditing and Assurance Standards Board (AUASB) is governed by section 236F of the Australian Securities and Investments Commission Act 2001. Under these provisions:
- The Financial Reporting Council (FRC) is responsible for appointing members of the AUASB (other than the Chair who is appointed by the Treasurer).
- A person must not be appointed as a member of the AUASB unless their knowledge of, or experience in, business, accounting, auditing, law or government qualifies them for appointment.
- Appointments are to be made for a period not exceeding 5 years.
- Members (other than the Chair) hold office on terms and conditions determined by the FRC.
The AUASB's functions include the making of auditing standards for the purposes of the corporations legislation, the formulating of auditing and assurance standards for other purposes, and participation in the formulation of international auditing standards.
- The AUASB is subject to the broad oversight of the FRC - a body comprising representatives of the main stakeholders in the accounting standard setting process.
- The FRC sets the AUASB's broad strategic direction and approves its priorities, business plan, budget and staffing arrangements, but has no power to direct the AUASB in relation to the development or making of a particular standard.
Members of the AUASB are appointed on a part-time basis for terms which are normally two or three years.
Members are appointed on merit, have a good technical knowledge of auditing and come from a variety of backgrounds to encompass `users' (broadly defined) as well as `preparers' of financial reports. As well as technical expertise, members will usually have experience in business or government, a broad policy perspective, and a full understanding of the practical business or government environments in which auditing standards are applied. Members will also bring a keen public interest perspective to the Board. Appointments will aim to balance public and private sector expertise and also take gender considerations into account.
The position involves a significant time commitment. The AUASB typically holds 7-8 meetings a year, plus occasional meetings on a needs basis. The majority of meetings are held in Melbourne.
The remuneration of members is determined by the FRC. Members currently receive a daily fee of $1066 and reimbursement of travel expenses incurred up to the amounts applicable from time to time to Tier 1 public office holders under Remuneration Tribunal determinations.