Tuesday 8 November 2016
10:00am – 4:00pm
The meeting was declared open at 10:00am.
The Chair introduced Dr Richard Grant, newly recruited Manager of the Secretariat and Ms Jane Holmes, Team Leader, Secretariat.
The Chair also welcomed Mr Justin Lachal, National Director, AASB and AUASB. Mr Lachal provided a summary of his background and current priorities, including the recruitment of key positions for the AASB and AUASB.
The chair noted Judith Downes' apology.
1a. Attendees and apologies
|Bill Edge (Chair)|
|Merran Kelsall (from 11:40am)||AUASB|
|Stein Helgeby||Department of Finance|
|Noelle Kelleher||Vision Super|
|David Nicol||ACT Treasury|
|Lynn Wood (2-2:15 teleconference)||IFRS Foundation Trustees|
|Claire Osborne (teleconference)||Treasury|
|Alyce Reid (teleconference)||Treasury|
|Judith Downes||Bank Australia|
1b. Declarations of interest
Mr Mitchell provided the following corrections to the matters listed on his Declarations of Interest:
Remove: Director, Cigna Life Insurance New Zealand Limited; and Member, Trans-Tasman Accounting and Auditing Standards Advisory Group.
Update: Position on the National Provident Fund from Board Member to Deputy Chair; and position on Barnardos New Zealand from Director to Deputy Chair.
1c. Agenda Template
Members noted the new agenda template.
2. Matters for approval
2a. Minutes of the previous meeting
The minutes of the September meeting were endorsed by members with minor edits, making them more outcome and action focused.
It was agreed that future minutes will have a focus on outcomes and actions.
2b. Matters arising
Members noted the Chair's report on matters arising.
Members noted the AASB and AUASB Strategy Day will be held in May 2017.
The Chair asked the Secretariat to remove 'Secretariat to review current content on the FRC website' from item 12 as this will continually be reviewed and updated.
Members requested the current FRC website usage statistics.
3. Oversight of the Australian Standards (Accounting & Auditing)
3a. General - FRC Statutory Responsibilities
Members discussed the FRC functions regarding the AASB and AUASB and agreed to amend the AASB and AUASB Standard Setting Process diagrams to highlight the areas where the FRC's roles are particularly relevant.
General - Report on AASB/AUASB Back Office
Members noted the summary provided by Mr Lachal at the start of the meeting. Ms Peach added that the back office is still a work in progress but the signs are positive, HR policies and processes are being developed and new staff will add to the change in culture, focusing on being dynamic, flexible, forward looking and responsive.
Members reviewed the current AASB strategy and noted that the AASB would continue to operate in accordance with this strategy until a new strategy is agreed.
3b. Accounting Standards
Ms Peach outlined the key priorities for the AASB including the finalisation of the Standard on Income of Not-for-Profit Entities by Q4 2016.
Eric Lee (AASB) presented to members on the AASB's report on IFRS adoption in Australia. The report will be published in Q4 2016 and is positioned to be part of ongoing consultation regarding the application of transaction neutrality. The FRC will be provided with a draft of the report before it is finalised, to be circulated out of session. The FRC agreed that some elements of the report should be discussed in more depth, particularly:
- who are users of public sector financial statements, and more broadly how are users engaged in the standard setting process
- what are the conditions that would be necessary before it would be appropriate to consider adopting International Public Sector Accounting Standards (IPSASBs) for the public sector.
3c. Auditing Standards
Members noted the AUASB Chairman's report.
Ms Kelsall noted that this is a time of renewal, and she is working closely with Ms Peach and Mr Lachal. The Board is reluctant to make any changes before the new Chairman is appointed.
3d. Nominations Committee
Members noted the verbal report from Dr Helgeby, Chair Nominations Committee. The Secretariat will circulate the recruitment report to FRC members out of session for endorsement of appointments.
4. Oversight of Audit Quality
4a. Review Programs
The Chair tabled and discussed the Audit Quality Review Program table and members suggested new questions for completion by the accounting bodies and ASIC.
Members noted the media release 'International Audit Regulators Say Pace of Audit Quality Improvement too slow; Call for Measureable Improvement by 2019'.
5. Monitoring and Influencing Australian Developments
5a. Stakeholder Reports
Members noted the stakeholder reports.
5b. Stakeholder Engagement
Members noted the Chairs report on stakeholder engagement.
6. Monitoring and Influencing International Developments
6a. International Reports
IFRS Trustee Report
Members noted the IFRS Trustees Report as provided by Ms Wood.
6b. International Appointments
Members discussed representation from Australia and New Zealand on international boards. Ms Peach asked members to identify a pool of people with a range of different skill sets for nominations to the IASB, IAASB and the IFRS Advisory Council. Members noted Ms Lyn Provost from New Zealand will commence with the IAASB on 1 January 2017.
The Chair asked members to bring appropriate suggestions to the next meeting, including for the position of Chair, IFRS Trustees.
6c. Report by New Zealand XRB
The NZ XRB provided their report at item 5A - Stakeholder Reports.
6d. PwC Regulatory Briefing
Members noted the briefing provided by the Chair.
6e. PIOB Submission
Members agreed that the FRC should make a submission.
7. Other Business
7a. Annual Report 2016
Members noted the published Annual Report.
7b. FRC Website
The Chair noted the FRC website was discussed at item 2B.
8. Next Meeting and Close
8a. Meeting Dates for 2017
The dates suggested to members were unsuitable to some. The Secretariat will finalise 2017 meeting dates before the end of 2016.