Trans-Tasman Accounting Standard Advisory Group – Minutes

9.00am-12.00 noon, Thursday 19 February 2009

MED Building, 33 Bowen Street, Wellington

Present

Geoff Miller – Chair - (Treasury - Aust)
Jeffrey Lucy - (Financial Reporting Council (FRC) - Aust)
Kevin Simpkins - (Accounting Standards Review Board (ASRB) - NZ)
Denise Hodgkins (on behalf of Joanna Perry) - (Financial Reporting Standards Board (FRSB) - NZ)
Bruce Porter - (Australian Accounting Standards Board (AASB) - Aust)
Neil Cherry - (Professional Standards Board (PSB) - NZ)
Jon Tyers (on behalf of Merran Kelsall) - (Audit and Assurance Standards Board (AUASB) - Aust)
Patricia McBride (on behalf of Terry McLaughlin) - (NZ Institute of Chartered Accountants (NZICA) - NZ)
Andrew Conway - (National Institute of Accountants (NIA) - Aust)
Bill Palmer - (Institute of Chartered Accountants Australia (ICAA) - Aust)
Ms Liz Hickey (for agenda items 8 and 9) - Guest presenter
Peter Mumford - (Ministry of Economic Development (MED) - NZ)
Bob Stephens - (Ministry of Economic Development (MED) - NZ)
Ashley Tomlinson (for agenda item 6) - (Ministry of Economic Development (MED) - NZ)
Bede Fraser - (Treasury - Aust)
Ronita Ram - (Treasury - Aust)

Speakerphone

Suzanne Howarth - (Financial Reporting Council Secretary - Aust)
Mark Shying

Apologies

Andrew Jackson - (Ministry of Economic Development (MED) - NZ)
Geoff Connor - (Ministry of Economic Development (MED) - NZ)
Richard Murray (on behalf of Jim Murphy)

AGENDA ITEMS

1. Welcome

The TTAASAG Chair, Mr Geoff Miller, welcomed TTAASAG members to the first meeting of the Group in 2009.

2. Minutes from the meeting of 19 February 2009

The minutes of the previous meeting, held in Sydney on 10 December 2008, were confirmed without alteration.

3. Action items from previous meetings

The Group noted the action items arising from the previous meeting, and the relevant agenda item under which these action items would be addressed.

4. Update on New Zealand's audit regulation review

MED updated the Group on progress with New Zealand's review of its audit regulation framework and noted that this issue is still under consideration by the new Government, and would be progressed further in 2009. MED agreed to update the Group on progress with the review at the next TTAASAG meeting.

Action item

MED will provide an update on New Zealand's review of its audit regulation framework at the next meeting of TTAASAG.

5. TTAASAG 2008 Report to Ministers

Ms Ronita Ram provided an overview of the Group's draft Report to Ministers, which sets out the Group's priorities for 2009 and the work undertaken by the Group in 2008. The Group discussed the report, particularly the priorities for 2009, including the possible development of an outcomes agreement detailing accounting and auditing outcomes that would apply between Australia and New Zealand, responding to the global financial crisis, engagement with the Asia-Pacific region through the IFRS Regional Policy forum, the application of the IASB's standard for private entities, and enhancing our international influence through the work of the nominations sub-committee. The Group agreed that the report be revised to reflect the feedback provided by the Group.

Action item

Australian Treasury will circulate the revised Report to Ministers for the Group's comment before finalising the report.

6. Update on New Zealand's financial reporting framework review

Mr Peter Mumford and Mr Ashley Tomlinson updated the Group on progress with New Zealand's Financial Reporting Framework Review. As part of this review, MED established a steering committee to consider proposed reforms and to inform development of a public consultation paper. The steering committee comprises of representatives from MED, FRSB, ASRB and the Australian Treasury.

The Group noted that the steering committee has completed its draft report, which has been provided to MED. MED will now draft a discussion document based on the draft report. The Group noted that the report is expected to be released for public consultation in mid-2009, and that there will be an opportunity for TTAASAG to provide comments that can be taken into account in developing the discussion document.

Action item

MED will provide an update on New Zealand's financial reporting framework review at the next meeting of TTAASAG.

7. Common policy issues in Australia and New Zealand

7.1 Domestic adoption of IFRS

Mr Bede Fraser and Mr Bob Stephens provided an overview of the IFRS implementation processes in Australia and New Zealand.  The Group discussed this issue, and noted potential difficulties with implementing a legislative reference to IFRS, as this may diminish Parliamentary oversight and sovereignty.  The Group discussed other options to overcome perceptions about the adoption of IFRS, such as the possibility of creating an omnibus standard, which would allow the standards to be presented in an identical format to the IFRS standard.  Another option identified by the Group is to remove the “AASB” prefix from Australian accounting standards and replace it with an “Aus IFRS” prefix, so that users are able to easily discern which of the standards are based on an IFRS standard.  The Group also discussed sponsoring a website which identifies which countries have adopted IFRS, although it was noted that the establishment and maintenance of this website would be very resource intensive.

The Group agreed that an options paper should be prepared jointly by Australia and New Zealand exploring the possible legislative and non-legislative options in greater detail.

Action item

An options paper will be prepared exploring the legislative and non-legislative options to overcome perceptions about the adoption of IFRS for discussion at the next TTAASAG meeting.

7.2 Potential future topics

It was noted that the Group had previously agreed to discuss standard business reporting at a future TTAASAG meeting, and that the Standard Business Reporting team would, subject to their availability, attend the next meeting of the Group to discuss this issue.

Action item

The Group will discuss standard business reporting at the next meeting, subject to the availability of the Standard Business Reporting team.

8. Presentation by Ms Liz Hickey on the IASB / FASB Financial Crisis Advisory Group

Ms Liz Hickey delivered a presentation on the Financial Crisis Advisory Group on behalf of Jane Diplock. Ms Hickey provided an overview of the advisory group's role and membership. She also provided an update on the work of the advisory group, including a summary of previous meetings. The Group noted that a further two meetings of the advisory group are scheduled for March 2009 and April 2009. These meetings will consider due process and the need for standard setters to act promptly, as well as the independence of standard setters. Ms Hickey indicated that the advisory group was likely to produce a report of advice to the standard setting boards in 2009.

The Group thanked Ms Hickey for providing an update on the work of the advisory group and her insights on the key issues that the advisory group will be focussing on.

9. Update on response to the global financial crisis

Mr Jeffrey Lucy provided an update on the FRC's response to the G-20 action plan. The Group noted the progress of the G-20 working groups ahead of the Leader's meeting in April 2009.

Action item

An update will be provided on developments with the response to the G‑20's action plan to address the global financial crisis at the next TTAASAG meeting.

10. Professional accounting bodies

10.1 General report back on issues of relevance, including international events or conferences

Mr Andrew Conway updated the Group on the Asian Financial Forum held in Hong Kong in January 2009. The forum was attended by regional finance ministers and discussed a range of issues relating to the global financial crisis.

The Group also agreed that the professional accounting bodies should co-ordinate the report on their activities for future TTAASAG meetings.
Action item

The professional accounting bodies will provide a co-ordinated written report on their activities for the next meeting of TTAASAG.

11. Update on IFRS Regional Policy Forum

Mr Bede Fraser provided an update on the next IFRS Regional Policy Forum to be held in Beijing. The Group noted that the forum will be held on 15‑16 April 2009. China is currently finalising preparations for the meeting including the agenda and speakers. The Group noted that Australian Treasury has provided some initial comments on the draft agenda. Specific members also expressed their interest in speaking at the forum. Australian Treasury agreed to keep the Group informed of any developments in the lead up to the forum.

Action item

Australian Treasury will keep the Group informed of any developments that occur out of session in the lead up to the IFRS Regional Policy Forum.

12. Nominations sub-committee

12.1 Report from the nominations sub-committee

Mr Bede Fraser updated the Group on the recent activities of the nominations sub-committee, noting that the sub-committee wrote to the International Accounting Standards Council Foundation (IASCF) on behalf of an Australian academic for the academic member position on the International Accounting Standards Board (IASB) vacated by Professor Mary Barth. The Group noted that the nomination was subsequently not successful.

The Group also noted that, on 29 January 2009, the IASCF announced the completion of the first part of their Constitutional Review aimed at enhancing public accountability of the IASB. A key component of this work was the announcement of a new Monitoring Board to enhance the governance of the IASB. The Group noted the composition of the new Board, and that the comments made by the Australian Government concerning greater regional representation and inclusion of policy makers did not gain favour.
Action item

The nominations sub-committee will report on its activities for the next meeting of TTAASAG.

13. Auditing standard setters

13.1 Report from the PSB

The Group noted the PSB's report on its recent activities. Key issues identified in the report include reporting by auditors to trustees of an issuer of debt securities and an update on auditor regulation oversight in New Zealand. The report also noted the PSB's other domestic and international projects.

13.2 Report from the AUASB

The Group noted the AUASB's report on its recent activities, including feedback from the AUASB's consultative group meeting in December 2008. Other key issues identified in the report included the audit issues arising from the global financial crisis, particularly going concern issues. The Group also noted the AUASB's other domestic and international projects.

Action item

The PSB and the AUASB will continue to prepare commonly formatted reports on their recent activities for the next meeting of TTAASAG.

14. Accounting standard setters

14.1 Report from the FRSB

The Group noted the FRSB's report on its recent activities. Key issues identified in the report included an update on the FRSB's involvement in the financial reporting framework review and draft guidelines for modifying standards for Public Benefit Entities. The Group also noted progress on the FRSB's other domestic and international projects.

14.2 Report from the AASB

The Group noted the AASB's report on its recent activities. Key issues identified in the report included recent changes to accounting standard AASB 139 as a result of changes by the IASB to the international standard, an update on superannuation entities and an update on GAAP/GFS harmonisation. The Group also noted progress on the AASB's other domestic and international projects.

Action item

The FRSB and the AASB will continue to prepare commonly formatted reports on their recent activities for the next meeting of TTAASAG.

15. Other Business

As this was the final meeting for Bill Palmer, Mr Miller thanked Mr Palmer, on behalf of the Group, for his contribution to TTAASAG since its inception and the policy deliberation he has brought to the Group. The Group noted that Mr Lee White will replace Mr Palmer and will attend future meetings.

16. Next Meeting

In light of the Group's full agenda, the Group agreed to extend the duration of the next meeting, as well as future meetings. As such, the Group noted that the next meeting will commence half an hour earlier, from 1.00 pm to 4.30 pm on 19 May 2009, at the AASB/ AUASB boardroom, Level 7, 600 Bourke Street, Melbourne.