Legal framework for AASB appointments
The appointment of members of the Australian Accounting Standards Board (AASB) is governed by section 236B of the Australian Securities and Investments Commission Act 2001. Under these provisions:
- The Financial Reporting Council (FRC) is responsible for appointing members of the AASB (other than the Chair who is appointed by the Treasurer).
- A person must not be appointed as a member of the AASB unless their knowledge of, or experience in, business, accounting, 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 AASB's functions include making accounting standards for the private, public, and not-for-profit sectors, developing a conceptual framework for evaluating proposed Australian and international accounting standards, and participating in the formulation of international accounting standards.
- The AASB 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 AASB's broad strategic direction and approves its priorities, business plan, budget and staffing arrangements, but has no power to direct the AASB in relation to the development or making of a particular standard.
The AASB normally has 11 members (including the Chair). A secretariat provides it with high quality technical and administrative support.
Members of the AASB are appointed on a part-time basis (except the Chair who is full-time) for terms of either two or three years.
Members are appointed on merit, have a good technical knowledge of accounting and come from a variety of backgrounds to encompass `users' 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 accounting 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 AASB typically holds 7-8 two day 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.