CA ANZ and CPA Australia have made a joint submission to Treasury on its draft legislation to combine the Australian Accounting Standards Board (AASB), the Auditing and Assurance Standards Board (AUASB), and the Financial Reporting Council (FRC) into a single body; External Reporting Australia.

We support a more flexible arrangement for standards setting to deal with evolving demands, such as climate and sustainability reporting, particularly the creation of a standalone sustainability standards board. We acknowledge and appreciate the Draft Bill incorporates some of the key matters raised in our submission in response to the earlier Consultation Paper Positioning Australia’s financial reporting system for the future.

However, our analysis and engagement with key stakeholders and members have identified some major aspects of the Draft Bill that require amendment and/or clarification to meet the key design principles of ‘flexibility’, ‘strengthened accountability’ and ‘preserving existing strengths’, and ultimately serve the public interest.

Our key recommendations are in relation to:

1. Composition, size and capacity
2. Powers, functions and accountability
3. Due process, consultation and transparency
4. Balancing flexibility with accountability and integrity
5. Other future-proofing, drafting and practical recommendations including transition.