Commonwealth Consolidated Acts

AUSTRALIAN SECURITIES AND INVESTMENTS COMMISSION ACT 2001 - SECT 225

Functions generally

             (1)  The FRC functions are:

                     (a)  to provide broad oversight of the processes for setting accounting standards in Australia; and

                     (b)  to provide broad oversight of the processes for setting auditing standards in Australia; and

                     (c)  to monitor the effectiveness of auditor independence requirements in Australia; and

                     (d)  to give the Minister reports and advice about the matters referred to in paragraphs (a), (b) and (c); and

                     (e)  the functions specified in subsections (2) (specific accounting standards functions), (2A) (specific auditing standards functions) and (2B) (specific auditor independence 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.

Specific accounting standards 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; and

                     (e)  monitoring the development of international accounting standards and the accounting standards that apply in major international financial centres; and

                      (f)  furthering the development of a single set of accounting standards for world‑wide use with appropriate regard to international developments; and

                     (g)  promoting the continued adoption of international best practice accounting standards in the Australian accounting standard setting processes if doing so would be in the best interests of both the private and public sectors in the Australian economy; and

                     (h)  monitoring:

                              (i)  the operation of accounting 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

                             (ii)  the effectiveness of the consultative arrangements used by the AASB; and

                      (i)  seeking contributions towards the costs of the Australian accounting standard setting processes; and

                      (j)  monitoring the level of funding, and the funding arrangements, for those processes.

Specific auditing standards 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; and

                     (e)  monitoring the development of international auditing standards and the auditing standards that apply in major international financial centres; and

                      (f)  furthering the development of a single set of auditing standards for world‑wide use with appropriate regard to international developments; and

                     (g)  promoting the continued adoption of international best practice auditing standards in the Australian auditing standard setting processes if doing so would be in the best interests of both the private and public sectors in the Australian economy; and

                     (h)  monitoring:

                              (i)  the operation of auditing 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

                             (ii)  the effectiveness of the consultative arrangements used by the AUASB; and

                      (i)  seeking contributions towards the costs of the Australian auditing standard setting processes; and

                      (j)  monitoring the level of funding, and the funding arrangements, for those processes.

Specific auditor independence functions

          (2B)  The FRC functions include:

                     (a)  monitoring and assessing the nature and overall adequacy of:

                              (i)  the systems and processes used by Australian auditors to ensure compliance with auditor independence requirements; and

                             (ii)  the systems and processes used by professional accounting bodies for planning and performing quality assurance reviews of audit work undertaken by Australian auditors to the extent to which those reviews relate to auditor independence requirements; and

                            (iii)  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; and

                            (iv)  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; and

                             (v)  the investigation and disciplinary procedures of professional accounting bodies as those procedures apply to Australian auditors; and

                     (b)  monitoring the overall compliance by companies, registered schemes and disclosing entities with the audit‑related disclosure requirements of the Corporations Act and the accounting standards; and

                     (c)  giving the Minister reports and advice about the matters referred to in paragraphs (a) and (b); and

                     (d)  giving professional accounting bodies reports and advice about the matters referred to in subparagraphs (a)(ii), (iii), (iv) and (v); and

                     (e)  monitoring international developments in auditor independence, assessing the adequacy of the Australian auditor independence requirements provided for in:

                              (i)  the Corporations Act; and

                             (ii)  codes of professional conduct;

                            in the light of those developments and giving the Minister, and professional accounting bodies, reports and advice on any additional measures needed to enhance the independence of Australian auditors; and

                      (f)  promoting, and monitoring the adequacy of, 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 auditor independence.

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.