Merry Christmas to Peter Wilson. When it was suggested that Peter Wilson should be independent of the old board so that we can have a fresh start Peter responded with "That's your issue". Summary of the meeting here: viewtopic.php?f=23&t=594
A good summary of where we are up to by Joe Aston of the AFR, linked to from here: viewtopic.php?f=5&p=4137#p4137
If you are new to this website read the story so far: viewtopic.php?t=321#p1793
Check out some of the AFR articles, too many to list and check out some of the ABC reports: http://www.afr.com/business/accounting/ ... 215-h055ej http://www.afr.com/business/accounting/ ... 211-h02x1d http://www.abc.net.au/news/programs/the ... s,/8626662
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2004 - Financial Reporting Council - Memo of Understanding with CPA Australia

Discussions about the constitution and how CPA Australia is run
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JWheldon
Posts: 327
Joined: Wed May 24, 2017 6:43 pm

2004 - Financial Reporting Council - Memo of Understanding with CPA Australia

Post by JWheldon » Fri Sep 22, 2017 7:45 pm

How thing change. CPA should have high standards of reporting, not minimum standards.

http://www.frc.gov.au/about_the_frc/rul ... n/mou-cpa/

MOU between CPA Australia and the Financial Report Council
1. Parties to Memorandum

1.1 This Memorandum of Understanding (MOU) is between CPA Australia and the Financial Reporting Council (FRC).
2. Purpose

2.1 CPA Australia and the FRC recognise that they each have a role to play in promoting a robust system of auditor independence within Australia. Wherever possible and mutually beneficial, CPA Australia and the FRC will collaborate to ensure auditor independence and will promote open discussion on issues relating to the independence requirements of Australian Auditors.
3. Role and Responsibilities of CPA Australia

3.1 CPA Australia is a professional accounting body committed to integrity and excellence whose primary role is to represent its members and lead debate on issues affecting professional accountants and the wider business environment.

3.2 Under this MOU, the specific role and responsibilities of CPA Australia include:

Providing the FRC with information concerning CPA Australia’s Quality Assurance reviews, in relation to auditor independence, in particular:
The process of Quality Assurance Reviews; and
General outcomes from reviews undertaken.
Subject to paragraph 6.2 below, providing the FRC with information concerning CPA Australia’s disciplinary process regarding auditors, including:
CPA Australia’s Constitution, by-laws and procedures relative to disciplinary processes;
General information about Australian auditors who have been subject to disciplinary action by CPA Australia without necessarily identifying individual auditors;
Whether CPA Australia has received a complaint regarding auditor independence by an Australian auditor and any action taken by CPA Australia without necessarily identifying individual auditors;
Providing the FRC with CPA Australia’s Code of Professional Conduct and any revisions to the Code of Professional Conduct; and
Providing the FRC with information about relevant post graduate courses dealing with Auditor Independence.

4. Role and Responsibilities of the FRC

4.1 The FRC is an independent statutory body established by Part 12 of the Australian Securities and Investments Commission Act 2001 (ASIC Act).

4.2 The FRC has the following responsibilities:

To provide broad oversight of the process for setting accounting standards in Australia;
To provide broad oversight of the processes for setting auditing standards in Australia;
To monitor the effectiveness of auditor independence requirements in Australia; and
To provide the Minister responsible for the FRC with advice and reports about the matters falling within the scope of its responsibilities.

4.3 The specific auditor independence functions of the FRC include:

Monitoring and assessing the nature and overall adequacy of: The systems and processes used by Australian auditors to ensure compliance with auditor independence requirements;
The systems and processes used by professional accounting bodies for planning and performing quality assurance reviews of audit work undertaken by Australian auditors to the extent to which those reviews relate to auditor independence requirements;
The action that Australian auditors who have been subject to quality assurance reviews involving auditor independence requirements have taken in response to the reports prepared as a result of those reviews;
The action taken by professional accounting bodies to ensure that Australian auditors who have been subject to such quality assurance reviews involving auditor independence requirements respond appropriately to the reports prepared as a result of those reviews; and
The investigation and disciplinary procedures of the professional accounting bodies as those procedures apply to Australian auditors.
Monitoring the overall compliance by companies, registered schemes and disclosing entities with the audit-related disclosure requirements of the Corporations Act 2001 and the accounting standards.
Giving the professional accounting bodies reports and advice about the matters relating to the FRC’s auditor independence functions in relation to these bodies.
Monitoring international developments in auditor independence, assessing the adequacy of the Australian auditor independence requirements provided for in the Corporations Act and codes of professional conduct and in light of those developments, giving the Minister and professional accounting bodies reports and advice on any additional measures needed to enhance the independence of Australian auditors.
Promoting, and monitoring the adequacy of, the teaching of professional and business ethics by, or on behalf of, professional accounting bodies to the extent to which the teaching of those subjects relates to auditor independence.

4.4 Under this MOU, the specific role and responsibilities of the FRC include:

Consulting with CPA Australia on issues of auditor independence and ensuring that the advice, monitoring and reporting which the FRC undertakes is well informed and works effectively within the co-regulatory framework;
Assessing and advising CPA Australia of the adequacy of systems and processes used by CPA Australia members to deal with issues of auditor independence in light of information obtained by the FRC; and
Advising CPA Australia on continuing steps to enhance auditor independence.

5. Consultation

5.1 CPA Australia agrees to consult and share information - as far as is practicable and having regard to applicable laws – with the FRC in the development of policies relating to:

Auditor Independence;
The Code of Professional Conduct affecting auditors; and
Professional requirements affecting auditors.

5.2 Subject to the National Privacy Principles in the Privacy Act 1988, CPA Australia agrees to communicate any information to the FRC that it discovers in the course of its activities which may tend to indicate a contravention of the auditor independence provisions which:

Reveal systemic problems or a culture of failing to comply with its legal and ethical obligations within a firm or group of firms;
Appears to be a serious or deliberate contravention which is not minor or technical; or
May result in substantial loss to investors or which may have a materially adverse affect on the integrity of the market.

5.3 The FRC agrees to – as far as is practicable and having regard to applicable laws – consult with CPA Australia and share information in the development of any proposed policies, reports or recommendations relating to:

Auditor Independence;
A member of CPA Australia; and
The Audit profession generally.

6. Information Sharing

6.1 To facilitate the performance of the FRC’s auditor independence oversight functions, pursuant to section 225A of the ASIC Act, the FRC may obtain from CPA Australia information about or documents relating to:

Its Code of Professional Conduct and any proposed amendments to that Code;
Its planning and performance of quality assurance reviews, to the extent that those reviews apply to audit work undertaken by Australian auditors; and
Its investigation and disciplinary procedures, to the extent that those procedures apply to Australian auditors.

6.2 If the FRC requests information from CPA Australia relating to auditor independence, the FRC will clarify as precisely as possible the information or documents required. It is anticipated that aggregated information would generally be sufficient to discharge the FRC’s responsibilities regarding the oversight of auditor independence. However, CPA Australia recognises that occasionally the FRC may require more detailed information in order to test the quality of certain systems regarding auditor independence and to fulfill the FRC’s functions and powers.

6.3 CPA Australia and the FRC acknowledge that if CPA Australia receives a request for information regarding auditor independence from the FRC, CPA Australia will have qualified privilege in respect of a disclosure, pursuant to subsection 225A(3) of the ASIC Act. Additionally, a person responding to a notice from the FRC on behalf of a professional accounting body will also have qualified privilege in respect of a disclosure, pursuant to subsection 225A(4) of the ASIC Act.

6.4 Where outside of section 225A of the ASIC Act, CPA Australia volunteers identifying information to the FRC to assist it in its duties, the FRC and CPA Australia acknowledge that CPA Australia would be obliged to comply with the National Privacy Principles and may be required to first consult with the person from whom the information was received, depending on the nature of the information and the purpose for which the information was provided to CPA Australia.

6.5 In relation to information provided to the FRC other than in accordance with section 225A of the ASIC Act, the FRC recognises that CPA Australia may also be obliged to comply with the rules of natural justice and may be required to consult with a person likely to be adversely affected by a disclosure of the information, depending on the affect on the person and the use or disclosure proposed to be made.

6.6 The FRC will endeavour not to hold information provided by CPA Australia for longer than is required for the purpose for which CPA Australia provided the information.
7. Confidentiality

7.1 Section 237 of the ASIC Act, in part, provides that the FRC must take all reasonable measures to protect from unauthorised use or disclosure information given to it in confidence. However, it should be noted that the disclosure of information is taken to be authorised if the disclosure is required or permitted by a law of the Commonwealth or a prescribed law of a State or Territory, or is made to ASIC for the purposes of its performance of its functions under the corporations legislation (pursuant to paragraphs 237(2)(a) and (d)).

7.2 Recognising that information obtained in the course of monitoring auditor independence issues may be confidential or market sensitive, the FRC agrees to keep confidential, as much as is practicable for the FRC to fulfill its functions and powers, any such information provided by CPA Australia to the FRC relating to CPA Australia’s operations or regarding a member of CPA Australia and/or their clients.
8. Publicity

8.1 CPA Australia and the FRC recognise that it is not desirable to publicise a matter where to do so may harm either party’s position or the reputation of a third party. While publicising identifying information would not normally be warranted, CPA Australia and the FRC recognise that it may sometimes be necessary for the FRC to make certain information public in order to protect the public interest and/or the integrity of Australia’s financial market. An example of such an instance may be where the disclosure of particular information is necessary to highlight or address systemic failures in the area of auditor independence. In publicising any identifying information, the FRC would endeavour to only release details necessary for the FRC to fulfill its auditor independence role and exercise its functions and powers.

8.2 Where either CPA Australia or the FRC passes on information to the other under this MOU which may lead to an investigation or publicity in relation to either CPA Australia, a member of CPA Australia, or the FRC, the parties will use their best endeavours to consult with each other prior to this occurring.
9. Reporting to the Minister

9.1 Under paragraph 225(1)(d) of the ASIC Act the FRC is required to report to the Minister and provide advice to the Minister on matters relating to auditor independence. Where such a report or advice has or may have an impact on CPA Australia or a member of CPA Australia and the FRC considers it appropriate, the FRC will endeavour to consult with CPA Australia prior to the issue of the report or advice. Where appropriate, the FRC will also endeavour to provide CPA Australia, in advance, with a copy of such report or advice as provided to the Minister.
10. Disciplinary Action by CPA Australia

10.1 In respect of disciplinary action against a member of CPA Australia for a breach of professional and ethical requirements regarding auditor independence, CPA Australia undertakes to:

Inform the FRC of any disciplinary action taken against any member of CPA Australia in relation to a breach of CPA Australia’s auditor independence requirements without necessarily identifying individual auditors; and
Inform the FRC when, to CPA Australia’s knowledge, one of its members has been referred to the Company Auditors and Liquidators Disciplinary Board in relation to a breach of auditor independence requirements.

11. Liaison Between CPA AUSTRALIA and the FRC

11.1 To promote co-operation between the parties, regular liaison meetings will be held between CPA Australia and the FRC. These meetings should occur at least every six months.
12. Effective Date

12.1 This MOU is effective upon signature of the parties and will remain in effect unless and until terminated as provided below.
13. Amendments

13.1 This MOU may be modified or amended by written agreement between the parties. If it becomes apparent that it is necessary or desirable to amend or add to this MOU, CPA Australia and the FRC will each use their best endeavours to agree upon appropriate amendments or alterations as soon as possible thereafter.
14. Termination

14.1 CPA Australia or the FRC must give written notice to the other of its intention to terminate this agreement. The agreement will terminate 30 days after the date upon which the notice was given.

Signed for and on behalf of:

________________________
Dr Ken Levy
President
CPA Australia

On this date______, 2004

Signed for and on behalf of:

_________________________
Mr Charles Macek
Chairman
Financial Reporting Council

On this date______, 2004



http://www.frc.gov.au/about_the_frc/

Financial Reporting Council

The Financial Reporting Council (FRC) is responsible for overseeing the effectiveness of the financial reporting framework in Australia. Its key functions include the oversight of the accounting and auditing standards setting processes for the public and private sectors, providing strategic advice in relation to the quality of audits conducted by Australian auditors, and advising the Minister on these and related matters to the extent that they affect the financial reporting framework in Australia.

The FRC monitors the development of international accounting and auditing standards, works to further the development of a single set of accounting and auditing standards for world-wide use and promotes the adoption of these standards. It is a statutory body under Part 12 of the Australian Securities and Investments Commission Act 2001 (the ASIC Act).

Core objectives of the FRC

The FRC operates within a framework set out in the Australian Securities and Investments Commission Act 2001 (the Act). The Act sets out core objectives for accounting and auditing standard setting in Australia. The objectives are that:

Accounting standards should require the provision of information that:
allows users to make and evaluate decisions about allocating scarce resources;
assists directors to discharge their obligations in relation to financial reporting;
is relevant to assessing performance, financial position, financing and investment;
is relevant and reliable;
facilitates comparability; and
is readily understandable.
Auditing standards should require the provision of information that:
Provide Australian auditors with relevant and comprehensive guidance in forming an opinion about, and reporting on, whether financial reports comply with the requirements of the Corporations Act; and
Require the preparation of auditors’ reports that are reliable and readily understandable by the users of the financial reports to which they relate.
Accounting standards should facilitate the Australian economy by reducing the cost of capital and enabling Australian entities to compete effectively overseas.
Accounting and auditing standards should facilitate the Australian economy by having accounting and auditing standards that are clearly stated and easy to understand.
Accounting standards should maintain investor confidence in the Australian economy, including its capital markets.

The Act expressly limits the FRC's ability to become involved in the technical deliberations of the AASB and AUASB. It provides that the FRC does not have power to direct the AASB or AUASB in relation to the development, or making, of a particular standard, or to veto a standard formulated or recommended by the AASB or AUASB. This provision is designed to ensure the independence of the standard setter.
Committees
FRC Nominations Committee

The FRC Nominations Committee advises the FRC on the composition of the AASB and the AUASB, including making recommendations on appointments to those Boards.
Members

Mr Stein Helgeby (Chair)
Mr Bill Edge
Dr Roger Simnett AO
Ms Kris Peach
Ms Judith Downes
Ms Jackie Callaway

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Brett Stevenson
Posts: 445
Joined: Fri Mar 24, 2017 10:43 am

Re: 2004 - Financial Reporting Council - Memo of Understanding with CPA Australia

Post by Brett Stevenson » Sun Sep 24, 2017 7:40 am

This is a great post JWheldon. Well found.
It perhaps illustrates more clearly than anything the heights from which we have fallen in terms of accounting and reporting standards.
We profess being a leader yet it would seem to me that we have acted without regard to what we profess and have 'gamed' the rules - min. disclosure, consolidation standards, integrated reporting, international acctg body representation, ethical pronouncements, governance, fiduciary duties etc.
I reckon CPA has become a byword for almost the opposite of what we should represent. Let’s not start on The Naked CEO and sponsorship of the NBL or South Sydney Rugby Leagues Club. At least long serving director Kerry Ryan had the sense not to sponsor the Richmond AFL club where she is a director.
Even major questions about the standard of the auditing makes one cringe as a professional.

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