Chartered Accountants Australia and New Zealand (CA ANZ), CPA Australia, the Institute of Public Accountants (IPA) made a submission for Treasury’s consultation on the proposed changes to financial reporting for and auditing of APRA regulated super funds.

The Joint Accounting Bodies (JAB) broadly support the draft legislation.

The JAB agrees that there is a need to clarify the requirements around, and increase the transparency of, reporting by Registrable Superannuation Entities (RSEs). Whilst we support the proposals and broadly agree with the premise of using publicly listed companies as a benchmark for introducing statutory financial reporting and audit requirements for RSEs, we note that there are important differences between the characteristics of RSEs and those of publicly listed companies, as well as the ultimate user-needs of financial reports prepared by them.

Unfortunately this was a very short consultation.  In the limited time available to us to prepare this submission, we were not been able to identify every unintentional regulatory overlap.

The JAB made the following recommendations:

• A whole of government approach to regulatory policy should be adopted.
• Opportunities to streamline regulatory processes and address instances of regulatory overlap should be identified.
• An explicit statutory requirement should be introduced for RSEs to make annual financial reports available on their website.
• Annual financial report access fees normally charged by the Australian Securities and Investments Commission (ASIC) should be waived in the instance of RSE reports.
• RSEs should have an explicit statutory requirement to prepare annual financial statements in accordance with the Australian Accounting Standards (AAS).
• Preparation of financial reports for sub-funds should be deferred until the reporting objective, and the definition of “sub-fund”, are clarified.
• The effective date for funds publishing interim financial statements should be delayed for at least two years after the legislation is enacted, so that a cost/benefit analysis can be undertaken to determine whether this requirement should be retained.
• Disclosures should reflect fee categories which help to differentiate the services which may create a threat to the auditor’s independence, by inclusion of an additional category for “audit-related services”.
• RSEs auditors should have an explicit statutory requirement to comply with the Australian Auditing and Assurance Standards.
• Strict liability for auditors is inappropriate. 
• Draft regulations should be released for consultation as soon as possible, with a timeframe for feedback that permits appropriate levels of consultation and for well-informed submissions to be made.