The Senate Economics Legislation Committee is undertaking an inquiry into the Treasury Laws Amendment (Financial Reporting System Reform) Bill 2026 (the Bill). The Bill establishes a new entity, External Reporting Australia, that will consolidate the Financial Reporting Council (FRC) with Australia’s standard-setting bodies for accounting (AASB) and auditing (AUASB).

CA ANZ and CPA Australia have lodged a joint submission directed at ensuring that the reforms achieve their stated objectives in practice, while preserving the strengths of the existing framework. We have concerns about some aspects of the Bill that we believe should be addressed to ensure the effectiveness and integrity of the framework is maintained. Our submission therefore reiterates a limited number of targeted recommendations that we have raised previously but have not been incorporated into the Bill, and we believe a post implementation review is critical.

Our recommendations for legislative inclusion are as follows:

• embedding sufficiently rigorous and transparent due process requirements;
• the size, composition and skills mix of the Governing Council;
• minimum board sizes to safeguard technical capability and diversity of views;
• clarity and safeguards around Governing Council intervention powers;
• mandatory consultation in the development of standards;
• ensuring an explicit role for External Reporting Australia in influencing the development of international standards adopted in Australia; and
• adding a requirement for an independent post implementation review into ERA, its role, its functions and its operations two years and five years after inception.