1.00pm-4.30pm, Tuesday 19 May 2009
AASB/ AUASB board room, Level 7, 600 Bourke Street, Melbourne
Geoff Miller – Chair - (Treasury - Aust)
Jeffrey Lucy - (Financial Reporting Council (FRC) - Aust)
Bruce Porter - (Australian Accounting Standards Board (AASB) - Aust)
Joanna Perry - (Financial Reporting Standards Board (FRSB) - NZ)
Merran Kelsall - (Audit and Assurance Standards Board (AUASB) - Aust)
Neil Cherry - (Professional Standards Board (PSB) - NZ)
Terry McLaughlin - (NZ Institute of Chartered Accountants (NZICA) - NZ)
Bruce Bennett - (NZ Institute of Chartered Accountants (NZICA) - NZ)
Andrew Conway - (National Institute of Accountants (NIA) - Aust)
Vicki Stylianou - (National Institute of Accountants (NIA) - Aust)
Lee White - (Institute of Chartered Accountants Australia (ICAA) - Aust)
Mark Shying - (Certified Practising Accountants (CPA) - Aust)
Andrew Jackson - (Ministry of Economic Development (MED) - NZ)
Rory McLeod - (Ministry of Economic Development (MED) - NZ)
Jim Murphy - (Treasury - Aust)
Paul Madden (for agenda item 7) - (Treasury - Aust)
Harm Jan van Burg (for agenda item 7) - (Ministry of Finance - Netherlands)
Bede Fraser - (Treasury - Aust)
Ronita Ram - (Treasury - Aust)
Kevin Simpkins - (Accounting Standards Review Board (ASRB) - NZ)
Suzanne Howarth - (Financial Reporting Council Secretary - Aust)
Geoff Connor - (Ministry of Economic Development (MED) - NZ)
The TTAASAG Chair, Mr Geoff Miller, welcomed TTAASAG members to the second meeting of the Group in 2009.
2. Minutes from the meeting of 19 February 2009
The minutes of the previous meeting, held in Wellington on 19 February 2009, 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
Mr Andrew Jackson 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 Government, and would be progressed later in 2009. Mr Jackson advised that the Government has sought input from NZICA on how NZICA was regulating its members at the time the finance companies were getting into difficulties and what if anything would have been different had there been auditor oversight in New Zealand at the time of the finance company failures. Mr Jackson indicated that any new framework would be consistent with the European Union model under the 8th directive. MED agreed to update the Group on progress with the review at the next TTAASAG meeting.
MED will provide an update on New Zealand's review of its audit regulation framework at the next meeting of TTAASAG.
5. Update on New Zealand's financial reporting framework review
Mr Andrew Jackson 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 was comprised of representatives from MED, FRSB, ASRB and the Australian Treasury.
The Group noted that MED's discussion document is expected to be released for public consultation in June or July 2009, subject to the Minister's approval. The discussion document is based on a draft report prepared by the steering committee.
It was noted that this work would provide an ideal opportunity to further align the financial reporting frameworks in Australia and New Zealand.
MED will provide an update on New Zealand's financial reporting framework review at the next meeting of TTAASAG.
6. Common policy issues in Australia and New Zealand
6.1 TTAASAG's outcomes agreement
Mr Miller facilitated a discussion on the possible development of a set of accounting and auditing outcomes that would apply reciprocally between Australia and New Zealand. These outcomes would form part of a broader Single Economic Market outcomes agreement, which would identify outcomes on a wide range of issues between Australia and New Zealand. The development of an outcomes agreement was also identified in the Group's Report to Ministers as a priority in 2009.
Given the differing legal system between the two countries, obtaining agreement to identical law has been and will continue to be difficult to achieve. However, an agreement to a shared outcome is much more achievable and can have a significant impact for harmonising the nations relatively quickly without the need for developing joint single law or joint institutions.
The Group discussed possible issues that could be included in the outcomes agreement, including:
- similar financial reporting requirements in both jurisdictions;
- ensuring that auditors registered in one country can operate as if they were registered as auditors in the other country;
- further aligning the corporate governance frameworks, including regulation of director and executive remuneration; and
- co-ordinating any future amendments relating to the payment of dividends and parent‑entity financial reporting.
The Group also agreed to identify other possible issues to include in the outcomes agreement out of session.
TTAASAG members will identify possible issues to include in TTAASAG's outcomes agreement and provide suggestions to Australian Treasury. Australian Treasury will incorporate the suggestions into a draft document and circulate the suggestions for the Group's comment before finalising the Group's input into the outcomes agreement.
6.2 Update on response to the global financial crisis
Mr Jeffrey Lucy provided an overview of his recent international meetings, particularly those related to the global financial crisis. Mr Lucy also updated the Group on the FRC's response to the G-20 action plan and recent developments at the international level, including the outcomes of the G-20 Leader's meeting in April 2009.
An update will be provided on the response to the G‑20's action plan to address the global financial crisis at the next TTAASAG meeting.
6.3 Going concern issues
Mr Bede Fraser provided an overview of recent developments with respect to guidance on the operation of the going concern assumption. The Group noted that the current framework is extensive and appears to be working well even in the current economic environment, and that in Australia, the corporate regulator will continue to monitor this issue. It was noted that the AUASB has recently issued guidance for auditors and is working with the Australian Institute of Company Directors on guidance to company directors. The ICAA informed the Group that it recently released guidance on a number of issues, including the going concern assumption. In addition, the PSB advised that it had recently issued a staff bulletin to increase the level of awareness on this issue. The Group also noted that the FRC intends to write to the Minister to inform the Minister that the current framework is functioning well.
6.4 Potential future topics
Mr Miller invited the Group to provide suggestions for any other topics of interest to both Australia and New Zealand for discussion at future meetings.
The Group will provide any suggestions for potential future topics of discussion out of session.
7. Presentation by Mr Paul Madden and Mr Harm Jan van Burg on Standard Business Reporting
Mr Paul Madden of Australian Treasury and Mr Harm Jan van Burg of the Ministry of Finance in Netherlands delivered a presentation to the Group on Standard Business Reporting (SBR) both in Australia and the Netherlands.
Mr Madden provided an overview of the SBR project and the benefits of SBR for businesses and intermediaries. Mr Madden informed the Group that a single SBR Financial Reporting Taxonomy was released in Australia on 31 March 2009. He explained that the required IFRS elements had been included in the SBR Taxonomy as there were specific issues with the IASCF's IFRS Taxonomy. While the details were discussed, written feedback had also been provided to the IASCF. The Group noted obstacles with the Australian taxonomy directly utilising the IFRS taxonomy being developed by the International Accounting Standards Committee Foundation.
The Group thanked Mr Madden and Mr van Burg for providing an update on the SBR project.
8. Reflections on the 2009 IFRS Regional Policy Forum, suggestions for the 2010 forum and opportunities for further regional engagement
Ms Ronita Ram provided an overview of the previous IFRS Regional Policy Forum held in Beijing on 16 April 2009. The Group noted that the forum provided a valuable opportunity to discuss policy issues affecting the region, particularly the accounting issues that have arisen in the context of the global financial crisis.
The Group also discussed the possibility of expanding the forum, for example, to include a broader range of policy issues such as those related to audit and audit regulation. The Group noted that a broader scope may allow a wider range of policy makers to attend the forum.
Australian Treasury will keep the Group informed of any discussions it has with Singapore regarding the arrangements for the next IFRS Regional Policy Forum.
9. Professional accounting bodies
9.1 Joint report on activities
The Group noted the professional accounting bodies' joint report on its recent activities.
The professional accounting bodies will provide a co-ordinated written report on their activities for the next meeting of TTAASAG.
10. Nominations sub-committee
10.1 Report from the nominations sub-committee
Mr Bede Fraser updated the Group on the recent activities of the nominations sub-committee, including an overview of the previous sub-committee meeting on 17 March 2009, which considered a range of upcoming vacancies advertised by the International Federation of Accountants (particularly vacancies on the International Auditing and Assurance Standards Board (IAASB) and the International Public Sector Accounting Standards Board (IPSASB), vacancies on the International Financial Reporting Interpretations Committee (IFRIC), and the re-composition of the Standards Advisory Committee (SAC). The Group also noted that the sub-committee has agreed that there would be benefits in including representation from the profession on the sub-committee.
The nominations sub-committee will report on its activities for the next meeting of TTAASAG.
10.2 Cross appointments for auditing standard setters
The Group discussed whether the current informal co-operation mechanisms between the auditing standard setters should be formalised by establishing formal cross appointment arrangements, similar to those in place for the accounting standard setters. The Group noted that there were a range of views of this topic. Some members noted that the current arrangements for communication and co‑operation are working well and are cost effective, and that formalising these existing arrangements may not result in any additional benefits. Other members noted though that formalising the current arrangements could provide an increased sense of commitment and co-operation.
The Group recognised that the current framework is working well and did not recommend that these arrangements be formalised at this stage. The Group agreed though to continue to monitor this issue.
11. Auditing standard setters
11.1 Report from the PSB
The Group noted the PSB's report on its recent activities.
11.2 Report from the AUASB
The Group noted the AUASB's report on its recent activities.
12. Accounting standard setters
12.1 Report from the FRSB
The Group noted the FRSB's report on its recent activities.
12.2 Report from the AASB
The Group noted the AASB's report on its recent activities.
12.3 Harmonising processes for modifying IFRS for not-for-profit and public benefit entities
This issue was not discussed due to time constraints.
12.4 Format of reports to TTAASAG
The possibility of the FRSB and AASB preparing joint reports for future TTAASAG meetings was raised.
The AASB and the FRSB will explore the possibility of providing a joint report for future TTAASAG meetings.
13. Other business
The Group noted the report provided by Mr Ken Warren on the IPSASB meeting in February 2009.
The Group also agreed that it would be useful for Mr Warren to provide a presentation on the work of IPSASB at the next meeting of TTAASAG, subject to his availability.
Finally, the Group noted that the recently appointed chair of the IAASB may be amenable to visiting the region in May 2010, and that there would be potential to combine such a visit with a meeting of TTAASAG, subject to his availability.
14. Next meeting
The Group noted that the next meeting will take place from 9.00 am to 12.30 pm on 2 September 2009, at the MED building, 33 Bowen Street, Wellington.