Today I introduce a bill which will amend the Australian Securities and Investments Commission Act 2001 to improve the financial management and administrative governance arrangements of the Australian Accounting Standards Board (known as the AASB) and the Auditing and Assurance Standards Board (known as the AUASB).

The bill will amend the financial framework of these boards by transferring them from the Commonwealth Authorities and Companies Act 1997 (or the CAC Act) to the Financial Management and Accountability Act 1997 (or the FMA Act). The bill will also make consequential changes to the functions of the Financial Reporting Council (known as the FRC).

Transferring the boards from the CAC Act to the FMA Act will enhance the existing governance arrangements. The CAC Act is not suited to the AASB and the AUASB as they do not serve a commercial purpose—rather, their purpose is to develop high quality accounting and auditing standards for the private and public sectors.

In addition, under the current governance arrangements, the FRC is responsible for a range of administrative functions relating to the AASB and the AUASB. However, these functions are more appropriately managed by the agencies.

The bill addresses these concerns and proposes a new governance structure which improves existing accountability and governance arrangements of the AASB and the AUASB.

The FMA Act better reflects the role of the AASB and AUASB, as they do not serve a commercial focus. The FMA Act also provides a rigorous framework for the management and expenditure of public money generally.

The bill does not change the current statutory functions performed by the AASB and AUASB with respect to the development of accounting and auditing standards. The bill contains measures solely to enhance the financial and administrative arrangements of the boards.

Consequential changes will be made to the FRC’s functions in relation to the approval of financial and administrative matters. This will allow the FRC to focus primarily on determining the broad strategic direction of the AASB and the AUASB.

The bill also ensures that the AASB and the AUASB are brought into line with similar measures to improve the governance and transparency of other agencies, such as the Australian Securities and Investments Commission and the Australian Prudential Regulation Authority.

This will result in greater consistency of governance arrangements across Commonwealth bodies.

Finally, I can inform the chamber that the Ministerial Council for Corporations was consulted in relation to the amendments to the laws in the national corporate regulation scheme, and has approved them as required under the Corporations Agreement.