BDO response to Treasury consultation: Positioning Australia’s financial reporting system for the future
BDO has submitted feedback to Treasury in response to the consultation paper on the proposed design of new institutional arrangements for setting Australia’s accounting, sustainability, and auditing and assurance standards; Positioning Australia’s Financial Reporting System for the Future. The BDO submission highlights several key areas of support as well as recommendations for improvement to ensure the future effectiveness and integrity of Australia’s financial reporting system.
At its core, BDO's response extends support for the Treasury's proposal to consolidate standard setting within a single body by combining the Australian Accounting Standards Board (AASB), the Auditing and Assurance Standards Board (AUASB), and the Financial Reporting Council (FRC).
To ensure the new single body is fit for purpose and serves all stakeholder interests, BDO has proposed several additional considerations to Treasury to strengthen governance and oversight including incorporating ethical standard setting into the scope of the proposed new body by adding an Ethical Standards Committee to the new model, establishing a new regulator (an independent accounting and audit oversight body), adjusting governance and reporting requirements for large audit, assurance and consulting partnerships to bring them in line with company reporting requirements and, ensuring an independent and representative Board supported by expert technical standard-setting committees with industry representation on both.
BDO chief executive partner Tony Schiffmann confirmed BDO’s support of the Treasury proposal to combine standard setters but stressed that the proposal could go further than its current scope to ensure the highest levels of financial reporting in Australia.
[In the BDO consultation response] “We agreed with Treasury’s proposal but want to emphasise the need for an independent accounting and audit regulator, separate from ASIC, to ensure focused oversight and enhanced transparency.
“Also, adding the Accounting Professional & Ethical Standards Board’s (APESB) functions into this proposed new structure would give ethical standards the force of law and would align with international best practices.
“We think this move is crucial for maintaining the integrity and quality of financial reporting in Australia,” commented Mr Schiffmann.
We’re calling for a clear delineation between standard setting and enforcement within the audit and assurance space. Our submission goes into detail in these areas and outlines our proposed thinking as to how this might work.” he concluded.
The composition of the governing board and committees was also an important area of the consultation and Mr Schiffmann highlighted the need for industry experts to be included on the Board and any sub-committees of the proposed new entity.
“Considering the pace at which accounting, sustainability, and auditing and assurance standards have developed and changed in recent years, it is crucial that both the Board and technical standard-setting committees include individuals with current practical experience who understand the landscape and where evolution will be required in the future,” said Mr Schiffmann.
“It would be a backward step to not include industry professionals on the Board and sub-committees of the proposed new entity.”
For media enquiries:
Jane Ward
Senior Manager, Media
E: Jane.Ward@bdo.com.au
Ph: +61 7 3173 5424