Treasury Laws Amendment (Financial Reporting System Reform) Act 2026

(61 of 2026)

An Act to amend the law relating to corporations, financial services and the financial reporting system, and for related purposes

[Assented to 7 July 2026]

The Parliament of Australia enacts:

Minister's second reading speech made in - House of Representatives on 12 February 2026; Senate on 11 March 2026

1 Short title

This Act is the Treasury Laws Amendment (Financial Reporting System Reform) Act 2026.

2 Commencement

(1) Each provision of this Act specified in column 1 of the table commences, or is taken to have commenced, in accordance with column 2 of the table. Any other statement in column 2 has effect according to its terms.

Commencement information
Column 1	Column 2	Column 3
Provisions	Commencement	Date/Details
1. Sections 1 to 3 and anything in this Act not elsewhere covered by this table	The day this Act receives the Royal Assent.	6 July 2026
2. Schedule 1, Part 1	The later of: (a) 1 November 2026; and (b) the first day of the first calendar month to occur after the end of the period of 4 months beginning on the day this Act receives the Royal Assent.	1 December 2026 (paragraph (b) applies)
3. Schedule 1, Part 2	The later of: (a) 30 June 2026; and (b) the day after this Act receives the Royal Assent.	7 July 2026 (paragraph (b) applies)
4. Schedule 1, Part 3	At the same time as the provisions covered by table item 2.	1 December 2026

Commencement information

Column 1

Column 2

Column 3

Provisions

Commencement

Date/Details

1. Sections 1 to 3 and anything in this Act not elsewhere covered by this table

The day this Act receives the Royal Assent.

6 July 2026

2. Schedule 1, Part 1

The later of:

(a) 1 November 2026; and

(b) the first day of the first calendar month to occur after the end of the period of 4 months beginning on the day this Act receives the Royal Assent.

1 December 2026

(paragraph (b) applies)

3. Schedule 1, Part 2

The later of:

(a) 30 June 2026; and

(b) the day after this Act receives the Royal Assent.

7 July 2026

(paragraph (b) applies)

4. Schedule 1, Part 3

At the same time as the provisions covered by table item 2.

1 December 2026

Note: This table relates only to the provisions of this Act as originally enacted. It will not be amended to deal with any later amendments of this Act.

(2) Any information in column 3 of the table is not part of this Act. Information may be inserted in this column, or information in it may be edited, in any published version of this Act.

3 Schedules

Legislation that is specified in a Schedule to this Act is amended or repealed as set out in the applicable items in the Schedule concerned, and any other item in a Schedule to this Act has effect according to its terms.

Schedule 1 Financial reporting system reform

Part 1 Main amendments

Australian Securities and Investments Commission Act 2001

1 Paragraph 1(1)(d)

Omit "a Financial Reporting Council, an Australian Accounting Standards Board, an Auditing and Assurance Standards Board", substitute "External Reporting Australia".

2 Subsection 5(1)

Repeal the following definitions:

(a) definition of AASB ;

(b) definition of AUASB .

3 Subsection 5(1)

Insert:

board member means a member of a standard-setting board (including the Chair and the Deputy Chair of the board).

Council associate member means an associate member of the Governing Council.

Council Chair means the Chair of the Governing Council.

Council Deputy Chair means the Deputy Chair of the Governing Council.

Council member means a member of the Governing Council (including the Council Chair and Council Deputy Chair), but does not include a Council associate member.

External Reporting Australia eligible representative means an individual who is not any of the following:

(a) a partner in a partnership that is a prescribed auditing firm;

(b) a director, secretary or senior manager of a company that is a prescribed auditing firm;

(c) a former partner in a partnership that is currently a prescribed auditing firm, if the individual is receiving regular and ongoing benefits, or has within the last 6 months received a material benefit, from the partnership;

(d) a former director, secretary or senior manager of a company that is currently a prescribed auditing firm, if either of the following apply:

(i) the individual is receiving regular and ongoing benefits, or has within the last 6 months received a material benefit, from the company;

(ii) the individual holds shares in the company.

Note: The term prescribed auditing firm is defined by reference to the number of registered company auditors in a partnership or company. For the purposes of the definition External Reporting Australia eligible representative , it is irrelevant whether or not the individual is a registered company auditor.

4 Subsection 5(1) (definition of FRC)

Repeal the definition.

5 Subsection 5(1)

Insert:

Governing Council means the Governing Council of External Reporting Australia.

6 Subsection 5(1) (paragraph (a) of the definition of member)

Omit ", the FRC, the AASB".

7 Subsection 5(1) (paragraphs (e), (ea) and (eb) of the definition of member)

Repeal the paragraphs.

7A Subsection 5(1)

Insert:

New Zealand board representative has the meaning given by subsection 231(7).

New Zealand Council representative has the meaning given by subsection 227A(6).

8 Subsection 5(1)

Repeal the following definitions:

(a) definition of Office of the AASB ;

(b) definition of Office of the AUASB .

9 Subsection 5(1)

Insert:

paid work means work for financial gain or reward (whether as an employee, a self-employed person or otherwise).

prescribed auditing firm means:

(a) a company that:

(i) is an authorised audit company; and

(ii) has more than 50 individuals who are registered company auditors and are either a director of the company or hold and beneficially own shares in the company; or

(b) a partnership that is an audit firm where the partnership has more than 50 partners who are registered company auditors.

To avoid doubt, the company or partnership may include individuals or partners that are not registered company auditors (for example a partnership may have some partners who are registered company auditors that provide audit services and other partners that are not registered company auditors that provide other services).

standard-setting board means a standard-setting board of External Reporting Australia established under section 230.

10 Paragraph 127(4)(a)

Omit "the FRC", substitute "External Reporting Australia".

11 Paragraph 213(2)(aa)

Omit "the FRC", substitute "External Reporting Australia".

12 After paragraph 224(aa)

Insert:

(ab) to facilitate the development of other kinds of standards and guidance materials to support markets, investors, businesses, consumers and other participants in the Australian economy and community; and

13 Divisions 1 to 3 of Part 12

Repeal the Divisions, substitute:

Division 1 - External Reporting Australia

225 External Reporting Australia

(1) The body known immediately before the commencement of this section as the Office of the Australian Accounting Standards Board is continued in existence with the new name, External Reporting Australia.

Note: See also section 25B of the Acts Interpretation Act 1901.

(2) External Reporting Australia consists of:

(a) the Governing Council; and

(b) the Council associate members; and

(d) the staff referred to in section 232.

(3) For the purposes of the finance law (within the meaning of the Public Governance, Performance and Accountability Act 2013):

(a) External Reporting Australia is a listed entity; and

(b) the Governing Council is the accountable authority; and

(i) the Council members;

(ii) the Council associate members;

(iii) the board members;

(iv) the staff referred to in section 232;

(v) persons whose services are made available to External Reporting Australia under section 232B; and

(d) the purposes of External Reporting Australia include:

(i) the functions of External Reporting Australia referred to in section 225A; and

(ii) the functions of the Governing Council referred to in section 226A.

225A Functions and powers of External Reporting Australia

(1) External Reporting Australia has the following functions:

(a) to do the following:

(i) make accounting standards under section 334 of the Corporations Act for the purposes of the corporations legislation (other than the excluded provisions);

(ii) make auditing standards under section 336 of the Corporations Act for the purposes of the corporations legislation;

(iii) make sustainability standards under section 336A of the Corporations Act for the purposes of the corporations legislation (other than the excluded provisions);

(b) to formulate accounting standards, auditing and assurance standards or sustainability standards:

(i) for publication on the internet; or

(ii) in respect of activities, matters or things (including engagements, reports, audits and reviews) in a Territory; or

(iii) for other purposes;

(d) to develop conceptual frameworks, not having the force of standards, for the purposes of evaluating:

(i) proposed accounting standards and international accounting standards; or

(ii) proposed auditing and assurance standards and international auditing standards; or

(iii) proposed sustainability standards and international sustainability standards;

(e) to participate in and contribute to the development of a single set of accounting standards, a single set of auditing standards and a single set of sustainability standards for world-wide use with appropriate regard to international developments;

(f) to monitor the development of, and amendments to, international accounting standards, international auditing standards and international sustainability standards;

(g) to monitor the development of accounting standards, auditing standards and sustainability standards as they apply in major international financial centres;

(h) to give strategic policy advice to the Minister in relation to its functions and powers under this Act;

(i) any other functions that are specified in an instrument under subsection (2);

(j) to do anything incidental to, or conducive to, the performance of any of the above functions.

Note 1: The standards mentioned in paragraph (a) are made and have legal effect under the Corporations Act.

Note 2: The standards mentioned in paragraph (b) do not have legal effect under the Corporations Act but may be applied or adopted by some other authority. See section 225B of this Act in relation to those standards.

(2) The Minister may, by legislative instrument:

(a) specify functions for the purposes of paragraph (1)(i); or

(b) specify procedural requirements that apply in relation to the performance of functions specified under paragraph (a).

(3) Without limiting subsection (2), functions specified under that subsection may relate to standards of any kind, whether or not they are accounting, auditing and assurance, or sustainability standards.

(4) External Reporting Australia has the power:

(a) to establish committees and consultative groups and monitor the effectiveness of these consultative arrangements; and

(b) to do anything that is necessary or convenient to be done for or in connection with the performance of its functions.

Manner of performing its functions

(5) External Reporting Australia must, so far as is practicable, perform its functions:

(a) in a manner that promotes the objects of this Part; and

(b) in a manner that promotes the continued adoption of international best practice accounting standards, auditing standards and sustainability standards in the Australian standard-setting processes, if doing so would be:

(i) in the best interests of both the private and public sectors in the Australian economy; and

(ii) in the public interest more broadly; and

(c) with regard to the interests of Australian corporations which raise or propose to raise capital in major international financial centres; and

(d) with regard to the public interest in the accessibility of appropriate and reliable financial and other related information about private sector entities and public sector entities to stakeholders of those entities, particularly investors and creditors.

Manner of making or formulating standards

(6) Without limiting subsection (1), External Reporting Australia may make or formulate:

(a) an accounting standard by issuing the text of an international accounting standard; and

(b) an auditing standard by issuing the text of an international auditing standard; and

(7) The text of an international standard referred to in subsection (6) may be modified:

(a) to the extent necessary to take account of the Australian legal or institutional environment; and

(b) in particular, to ensure that any disclosure and transparency provisions in the standard are appropriate to the Australian legal or institutional environment.

Manner of participating in the development of international standards

(8) Without limiting paragraph (1)(e), External Reporting Australia may distribute for consultation the text of any of the following (whether or not modified to take account of the Australian legal or institutional environment):

(a) a draft international accounting standard;

(b) a draft international auditing standard;

Other matters

(9) None of the following (if in writing) is a legislative instrument:

(a) guidance mentioned in paragraph (1)(c);

(b) conceptual frameworks mentioned in paragraph (1)(d).

225B Formulation of certain standards

(1) External Reporting Australia may, by written instrument, formulate a standard for the purposes of any of the following:

(a) its functions under paragraph 225A(1)(b) (which deals with accounting standards, auditing and assurance standards and sustainability standards other than for the purposes of the Corporations law);

(b) its functions under paragraph 225A(1)(i) (which deals with additional functions determined by the Minister) to the extent that they involve the formulation of standards.

(2) A standard under subsection (1) is a legislative instrument if, at the time it is formulated, any part of the standard could reasonably be expected to affect a person's rights or obligations under a law of the Commonwealth, whether directly or indirectly.

(3) Otherwise, a standard under subsection (1) is not a legislative instrument.

225C Minister may give directions about the role of international standards

(1) The Minister may, by legislative instrument, give written directions to External Reporting Australia about the role of international standards in the making, formulating or development of standards or other materials by External Reporting Australia.

(2) External Reporting Australia must comply with a direction under subsection (1).

(3) Despite regulations made for the purposes of paragraph 44(2)(b) of the Legislation Act 2003, section 42 (disallowance) of that Act applies to a direction given under subsection (1) of this section.

Division 2 - The Governing Council of External Reporting Australia

Subdivision A - Establishment and functions of the Governing Council

226 Establishment

The Governing Council of External Reporting Australia is established by this section.

226A Functions and powers of the Governing Council

(1) The functions of the Governing Council are:

(a) to ensure the proper, efficient and effective performance of External Reporting Australia's functions; and

(b) any other functions conferred on the Governing Council by this Act.

(2) The Governing Council may perform any of the functions and exercise any of the powers of External Reporting Australia.

(3) The Governing Council has power to do anything that is necessary or convenient to be done for, or in connection with, the performance of its functions.

(4) Anything done in the name of, or on behalf of, External Reporting Australia by the Governing Council, or with the authority of the Governing Council, is taken to have been done by External Reporting Australia.

(5) If a function or power of External Reporting Australia is dependent on the opinion, belief or state of mind of External Reporting Australia in relation to a matter, the function or power may be exercised upon the opinion, belief or state of mind of a person or body acting as mentioned in subsection (4) in relation to that matter.

(6) Subsections (2) and (3) have effect subject to section 233D (Governing Council involvement in standard setting).

Subdivision B - Governing Council members

227 Membership

The Governing Council consists of the following members:

(a) the Chair of the Governing Council;

(b) not fewer than 4, and not more than 8, other Council members.

227A Appointment

(1) The Council members are to be appointed by the Minister by written instrument.

Note: A Council member may be reappointed: see section 33AA of the Acts Interpretation Act 1901.

(2) The Council Chair may be appointed on a full-time basis or on a part-time basis.

(3) Other Council members are to be appointed on a part-time basis.

(4) A person is not eligible for appointment as a Council member unless the Minister is satisfied that the person is either an External Reporting Australia eligible representative or a New Zealand Council representative, and has experience in, or knowledge of, at least one of the following fields:

(aa) ethics;

(a) governance;

(b) business;

(d) law;

(e) government;

(f) accounting;

(g) auditing;

(h) sustainability or climate change;

(i) science;

(j) any other field the Minister considers appropriate having regard to a function of External Reporting Australia under paragraph 225A(1)(i).

(5) Before appointing a person as a Council member, the Minister must have regard to the principle that, so far as is practicable, the Governing Council should have an appropriate balance of expertise or experience in fields relevant to External Reporting Australia's functions.

(6) A New Zealand Council representative means an individual:

(a) appointed as the chair (or an equivalent position) of a New Zealand body (however described, including a board or committee) that has similar functions to the Governing Council; or

(b) whose proposed appointment to that position in the New Zealand body has been publicly announced; or

(c) who is a member of the New Zealand body and nominated by the body for the purposes of the Minister considering the member for appointment as a Council member or a Council associate member (as applicable).

227B Term of appointment

A Council member holds office for the period specified in the instrument of appointment. The period must not exceed 5 years.

Note: A Council member may be reappointed: see section 33AA of the Acts Interpretation Act 1901.

227C Deputy Chair

(1) The Governing Council may, in writing, appoint a Council member (other than the Council Chair) to be the Deputy Chair of the Governing Council.

(2) The Council Deputy Chair holds office until whichever first happens:

(a) the Council Deputy Chair's period of appointment (if any is specified) ends; or

(b) the Council Deputy Chair resigns the Council Deputy Chair's appointment in accordance with subsection 227L(3); or

(d) the Governing Council terminates the appointment of the Council Deputy Chair.

Note: A person may cease to be the Deputy Chair of the Governing Council without ceasing to be a Council member.

227D Acting appointments

Acting Council Chair

(1) The Minister may, by written instrument, appoint a person to act as the Council Chair:

(a) during a vacancy in the office of the Council Chair (whether or not an appointment has previously been made to the office); or

(b) during any period, or during all periods, when the Council Chair:

(i) is absent from duty; or

(ii) is, for any reason, unable to perform the duties of the office.

Acting Council Deputy Chair

(2) The Governing Council may, by written instrument, appoint a Council member to act as the Council Deputy Chair:

(a) during a vacancy in the office of the Council Deputy Chair (whether or not an appointment has previously been made to the office); or

(b) during any period, or during all periods, when the Council Deputy Chair:

(i) is absent from duty; or

(ii) is, for any reason, unable to perform the duties of the office.

Acting appointments (other than the Council Chair)

(3) The Minister may, by written instrument, appoint a person to act as a Council member (other than the Council Chair):

(a) during a vacancy in the office of a Council member (other than the Council Chair), whether or not an appointment has previously been made to the office; or

(b) during any period, or during all periods, when such a Council member:

(i) is absent from duty or from Australia; or

(ii) is, for any reason, unable to perform the duties of the office.

Note: For rules that apply to acting appointments, see sections 33AB and 33A of the Acts Interpretation Act 1901.

Eligibility

(4) A person is not eligible for appointment under subsection (1) or (3) unless the Minister is satisfied that the person is eligible for appointment as a Council member.

(5) In appointing a person under subsection (1) or (3), the Minister must have regard to the principle mentioned in subsection 227A(5).

227E Terms and conditions - general

A Council member holds office on the terms and conditions (if any) in relation to matters not covered by this Act as the Minister determines in writing.

227F Remuneration - general

(1) A Council member is to be paid the remuneration that is determined by the Remuneration Tribunal. If no determination of that remuneration by the Tribunal is in operation, the member is to be paid the remuneration that is prescribed under subsection (4).

(2) A Council member is to be paid the allowances that are prescribed under subsection (4).

(3) This section has effect subject to:

(a) the Remuneration Tribunal Act 1973; and

(b) section 227G of this Act.

(4) The Minister may, by legislative instrument, prescribe:

(a) remuneration for the purposes of subsection (1); and

(b) allowances for the purposes of subsection (2).

227G Remuneration - certain Council members

Determination in relation to a particular Council member

(1) The Minister may, by writing, determine that section 227F does not apply in relation to a particular person's appointment as a Council member (not including as the Council Chair).

(2) The determination may only be made on or before the day the instrument of appointment for the Council member is made by the Minister.

(3) The Minister may, by writing, determine that the Council member is to be paid the remuneration or allowances (which may be nil) specified in the determination.

(4) A determination under subsection (1) or (3) is not a legislative instrument.

Determination in relation to a class of Council members

(5) The Minister may, by legislative instrument, determine that section 227F does not apply in relation to the appointment of Council members (not including the Council Chair) included in a specified class.

(6) The determination does not apply to a Council member whose instrument of appointment is made before the day the determination is made by the Minister.

(7) The Minister may, by legislative instrument, determine that Council members to whom a determination under subsection (5) applies are to be paid the remuneration or allowances (which may be nil) specified in the determination.

Other matters

(8) Despite the Remuneration Tribunal Act 1973, a person who is a Council member to whom a determination under subsection (1) or (5) of this section applies is not entitled to be paid remuneration or allowances in relation to the person's appointment as a Council member, except as determined under subsection (3) or (7).

(9) Remuneration and allowances determined for a Council member under subsection (3) or (7) must not exceed the remuneration and allowances that would be payable to the Council member were section 227F to apply.

227H Leave of absence

(1) If the Council Chair is appointed on a full-time basis:

(a) the Council Chair has the recreation leave entitlements that are determined by the Remuneration Tribunal; and

(b) the Minister may grant the Council Chair a leave of absence, other than recreation leave, on such terms and conditions as to remuneration or otherwise as the Minister determines.

(2) The Minister may grant leave of absence to any part-time Council member on the terms and conditions that the Minister determines.

227J Other paid work

If theCouncil Chair is appointed on a full-time basis, the Council Chair must not engage in paid work outside the duties of the Council Chair's office without the Minister's approval.

227K Disclosure of interests

(1) A disclosure by a Council member under section 29 of the Public Governance, Performance and Accountability Act 2013 (about disclosure of interests) must, as soon as practicable after the member becomes aware of the interest, be made to the other Council members and the Council associate members.

(2) Subsection (1) applies regardless of when the next meeting of the Governing Council is to be held.

(3) The Council member presiding at the first meeting of the Governing Council following the making of the disclosure must:

(a) table the disclosure at that meeting; and

(b) ensure that the interest disclosed is recorded in the minutes of that meeting.

(4) Subsection (1) applies in addition to any rules made for the purposes of that section.

(5) For the purposes of this Act and the Public Governance, Performance and Accountability Act 2013, the Council member is taken not to have complied with section 29 of that Act if the Council member does not comply with subsection (1) of this section.

227L Resignation of appointment

(1) A Council member may resign the member's appointment by giving the Minister a written resignation.

(2) The resignation of a Council member under subsection (1) takes effect on the day it is received by the Minister or, if a later day is specified in the resignation, on that later day.

(3) A Council member may resign an appointment as Council Deputy Chair by giving the Council Chair a written notice of resignation. The resignation does not affect the person's appointment as a Council member.

(4) The resignation of the Council Deputy Chair under subsection (3) takes effect on the day it is received by the Council Chair or, if a later day is specified in the resignation, on that later day.

227M Termination of appointment

(1) The Minister may terminate the appointment of a Council member:

(a) for misbehaviour; or

(b) if the member is unable to perform the duties of the member's office because of physical or mental incapacity; or

(c) if the member makes a disclosure of information that is inconsistent with External Reporting Australia's obligation under section 234B (confidentiality); or

(d) in the case of a member who was appointed on the basis that the member was an External Reporting Australia eligible representative - if the member is no longer an External Reporting Australia eligible representative; or

(e) in the case of a member who was appointed on the basis that the member was a New Zealand Council representative in relation to a New Zealand body - if the member is not a member of the New Zealand body.

(2) The Minister must terminate the appointment of a Council member if the Council member:

(a) becomes bankrupt; or

(b) applies to take the benefit of any law for the relief of bankrupt or insolvent debtors; or

(d) makes an assignment of the member's remuneration for the benefit of the member's creditors.

(3) The Minister may terminate the appointment of a Council member if:

(a) the Council member is absent, except on leave of absence, from 3 consecutive meetings of the Governing Council; or

(b) for a Council Chair - the Council Chair is absent, except on leave of absence, for 14 consecutive days or for 28 days in any 12 months; or

(c) for a Council Chair appointed on a full-time basis - the Council Chair engages, except with the Minister's approval, in paid work outside the duties of the Chair's office (see section 227J); or

(d) the Council member fails, without reasonable excuse, to comply with section 29 of the Public Governance, Performance and Accountability Act 2013 (which deals with the duty to disclose interests) or rules made for the purposes of that section.

Subdivision C - Governing Council associate members

228 Appointment

(1) The Council associate members are to be appointed by the Minister by written instrument.

Note: A Council associate member may be reappointed: see section 33AA of the Acts Interpretation Act 1901.

(2) The Council associate members are to be appointed on a part-time basis.

(3) A person is not eligible for appointment as a Council associate member unless the Minister is satisfied that the person is eligible for appointment as a Council member.

(4) The Minister must not appoint a person as a Council associate member if, when the person would start to hold office, the number of Council associate members would be more than one-third of the sum of the number of Council members and Council associate members.

228A Term of appointment

A Council associate member holds office for the period specified in the instrument of appointment. The period must not exceed 5 years.

Note: A Council associate member may be reappointed: see section 33AA of the Acts Interpretation Act 1901.

228B Terms and conditions - general

A Council associate member holds office on the terms and conditions (if any) in relation to matters not covered by this Act as the Minister determines in writing.

228C Remuneration - general

(1) A Council associate member is to be paid the remuneration that is determined by the Remuneration Tribunal. If no determination of that remuneration by the Tribunal is in operation, the member is to be paid the remuneration that is prescribed under subsection (4).

(2) A Council associate member is to be paid the allowances that are prescribed under subsection (4).

(3) This section has effect subject to:

(a) the Remuneration Tribunal Act 1973; and

(b) section 228D of this Act.

(4) The Minister may, by legislative instrument, prescribe:

(a) remuneration for the purposes of subsection (1); and

(b) allowances for the purposes of subsection (2).

228D Remuneration - certain Council associate members

Determination in relation to a particular Council associate member

(1) The Minister may, by writing, determine that section 228C does not apply in relation to a particular person's appointment as a Council associate member.

(2) The determination may only be made on or before the day the instrument of appointment for the Council associate member is made by the Minister.

(3) The Minister may, by writing, determine that the Council associate member is to be paid the remuneration or allowances (which may be nil) specified in the determination.

(4) A determination under subsection (1) or (3) is not a legislative instrument.

Determination in relation to a class of Council associate members

(5) The Minister may, by legislative instrument, determine that section 228C does not apply in relation to the appointment of Council associate members included in a specified class.

(6) The determination does not apply to a Council associate member whose instrument of appointment is made before the day the determination is made by the Minister.

(7) The Minister may, by legislative instrument, determine that Council associate members to whom a determination under subsection (5) applies are to be paid the remuneration or allowances (which may be nil) specified in the determination.

Other matters

(8) Despite the Remuneration Tribunal Act 1973, a person who is a Council associate member to whom a determination under subsection (1) or (5) of this section applies is not entitled to be paid remuneration or allowances in relation to the person's appointment as a Council associate member, except as determined under subsection (3) or (7).

(9) Remuneration and allowances determined for a Council associate member under subsection (3) or (7) must not exceed the remuneration and allowances that would be payable to the Council associate member were section 228C to apply.

228E Leave of absence

The Minister may grant leave of absence to a Council associate member on the terms and conditions that the Minister determines.

228F Disclosure of interests

(1) For the purposes of rules made for the purposes of section 29 of the Public Governance, Performance and Accountability Act 2013 (about disclosure of interests), the Council associate members are taken to be Council members. However, nothing in those rules permits a Council associate member to vote on a matter.

(2) A disclosure by a Council associate member under section 29 of that Act must, as soon as practicable after the Council associate member becomes aware of the interest, be made to the Council members and the other Council associate members.

(3) Subsection (2) applies regardless of when the next meeting of the Governing Council is to be held.

(4) The Council member presiding at the first meeting of the Governing Council following the making of the disclosure must:

(a) table the disclosure at that meeting; and

(b) ensure that the interest disclosed is recorded in the minutes of that meeting.

(5) Subsection (2) applies in addition to any rules made for the purposes of that section.

(6) For the purposes of this Act and the Public Governance, Performance and Accountability Act 2013, the Council associate member is taken not to have complied with section 29 of that Act if the Council associate member does not comply with subsection (2) of this section.

228G Resignation of appointment

(1) A Council associate member may resign the member's appointment by giving the Minister a written resignation.

(2) The resignation of a Council associate member under subsection (1) takes effect on the day it is received by the Minister or, if a later day is specified in the resignation, on that later day.

228H Termination of appointment

(1) The Minister may terminate the appointment of a Council associate member:

(a) for misbehaviour; or

(b) if the member is unable to perform the duties of the member's office because of physical or mental incapacity; or

(c) if the member makes a disclosure of information that is inconsistent with External Reporting Australia's obligation under section 234B (confidentiality); or

(2) The Minister must terminate the appointment of a Council associate member if the member:

(a) becomes bankrupt; or

(b) applies to take the benefit of any law for the relief of bankrupt or insolvent debtors; or

(d) makes an assignment of the member's remuneration for the benefit of the member's creditors.

(3) The Minister may terminate the appointment of a Council associate member if:

(a) the Council associate member is absent, except on leave of absence, from 3 consecutive meetings of the Governing Council; or

(b) the Council associate member fails, without reasonable excuse, to comply with section 29 of the Public Governance, Performance and Accountability Act 2013 (which deals with the duty to disclose interests) or rules made for the purposes of that section.

Subdivision D - Procedures of the Governing Council

229 Convening meetings

(1) The Governing Council must hold such meetings as are necessary for the efficient performance of its functions.

(2) The Council Chair:

(a) may convene a meeting at any time; and

(b) must convene at least 4 meetings each calendar year; and

(c) must convene a meeting within 30 days after receiving a written request to do so from another Council member or a Council associate member.

229A Quorum

(1) At a meeting of the Governing Council, a quorum is constituted by

(a) if there are not more than 7 Council members - 4 Council members; or

(b) if there are more than 7 Council members - 5 Council members.

(2) However, if:

(a) a Council member is required by rules made for the purposes of section 29 of the Public Governance, Performance and Accountability Act 2013 not to be present during the deliberations, or to take part in any decision, of the Governing Council with respect to a particular matter; and

(b) when the Council member leaves the meeting concerned there is no longer a quorum present;

the remaining Council members at the meeting constitute a quorum for the purpose of any deliberation or decision at that meeting with respect to that matter.

229B Participation etc. by Council associate members at meetings

(1) A Council associate member is entitled to attend, and participate in discussions at, a meeting of the Governing Council.

(2) Subsection (1) has effect subject to any rules made for the purposes of section 29 of the Public Governance, Performance and Accountability Act 2013 (which deals with the duty to disclose interests).

229C Presiding at meetings

(1) The Council Chair must preside at all meetings of the Governing Council at which the Council Chair is present.

(2) If the Council Chair is not present at a meeting of the Governing Council, the Council Deputy Chair, if present, must preside at the meeting.

(3) If neither the Council Chair nor the Council Deputy Chair is present at a meeting of the Governing Council, the other Council members present must appoint one of themselves to preside.

229D Voting at meetings

(1) Subject to subsection 233D(4), a question arising at a meeting of the Governing Council is to be determined by a majority of the votes of the Council members present and voting.

(2) The person presiding at the meeting of the Governing Council has a deliberative vote and, if the votes are equal, a casting vote.

229E Minutes

The Governing Council must keep minutes of its meetings.

229F Conduct of meetings

The Governing Council may, subject to this Part, regulate proceedings at its meetings as it considers appropriate.

Note 1: Meetings of the Governing Council relating to certain standards are required to be held in public: see section 233E.

Note 2: Section 33B of the Acts Interpretation Act 1901 contains further information about the ways in which Governing Council members may participate in meetings.

229G Decisions without meetings

(1) The Governing Council is taken to have made a decision at a meeting if:

(a) without meeting, a majority of the Council members entitled to vote on the proposed decision indicate agreement with the decision; and

(b) that agreement is indicated in accordance with the method determined by the Governing Council under subsection (2); and

(c) all the Council members and the Council associate members were informed of the proposed decision, or reasonable efforts were made to inform all the Governing Council members and the Council associate members of the proposed decision.

(2) Subsection (1) applies only if the Governing Council:

(a) has determined that it may make decisions of that kind without meeting; and

(b) has determined the method by which Council members are to indicate agreement with proposed decisions.

(3) For the purposes of paragraph (1)(a), a Council member is not entitled to vote on a proposed decision if the Council member would not have been entitled to vote on that proposal if the matter had been considered at a meeting of the Governing Council.

(4) The Governing Council must keep a record of decisions made in accordance with this section.

229H Annual report

The annual report prepared by the Governing Council and given to the Minister under section 46 of the Public Governance, Performance and Accountability Act 2013 for a period must include:

(a) information describing any directions given by the Governing Council under subsection 233D(1) during that period; and

(b) for each of those directions - information setting out the reason for giving the direction; and

(c) information describing any decision of the Governing Council during that period to make, formulate, vary or revoke a particular standard that is of a kind determined for a standard-setting board under paragraph 230(1)(b); and

(d) for each of those decisions - information setting out the reason for those decisions.

Note 1: Subsection 233D(1) deals with directions given by the Governing Council to a standard-setting board in relation to a particular standard.

Note 2: For decisions of the kind mentioned in paragraph (c) of this section, see subsection 233D(3).

Division 3 - Standard-setting boards

Subdivision A - Establishment and functions of standard-setting boards

230 Establishment of standard-setting boards

Establishment, functions and powers

(1) The Governing Council may, by legislative instrument, determine:

(a) that a standard-setting board of a specified name is established; and

(b) the kinds of standards in relation to which the board is to perform functions; and

(c) any functions of External Reporting Australia for the purposes of subparagraph 230B(1)(a)(v) (additional functions that may be performed by the standard-setting board); and

(d) any powers of External Reporting Australia under paragraph 225A(4)(a) for the purposes of subparagraph 230B(1)(b)(i) (establishing committees and consultative groups etc.).

Note: For paragraph (b), see subsection 230A(1).

Operation of the board

(2) Subject to section 233E, the determination may also provide for:

(a) matters relating to the operation of the board, including:

(i) procedures for convening meetings of the board; and

(ii) procedures for determining who is to preside at a meeting of the board; and

(iii) determining who may attend a meeting of the board; and

(iv) the constitution of a quorum for a meeting of the board; and

(v) procedures relating to a member's interest in matters being dealt with by the board; and

(vi) the way in which matters are to be resolved by the board; and

(b) the manner in which the board is to perform functions or exercise powers (such as consultation or other procedural requirements); and

(d) reporting requirements for the board.

Note 1: Section 233E requires meetings of a standard-setting board relating to the contents of certain standards to be held in public.

Note 2: Any procedures included in the determination under subparagraph (2)(a)(v) are in addition to the member's obligations under section 231H (disclosure of interests).

Note 3: The Governing Council's ability to determine the broad strategic direction of a standard-setting board is in addition to its power to give specific directions relating to standard setting (see section 233D).

(3) The determination may allow the board to determine a matter relating to the operation of the board for which the determination may provide.

(4) If the determination does not provide for a matter mentioned in paragraph (2)(a), the board may operate in the way it determines in relation to that matter.

230A Allocation of functions across boards

(1) The kinds of standards determined for a standard-setting board under paragraph 230(1)(b) must not extend beyond a single category of standards mentioned in subsection (3) of this section, except to the extent that standards relate to a function conferred on External Reporting Australia under paragraph 225A(1)(i).

(2) The Governing Council must ensure at all times that, for each category of standards mentioned in subsection (3) of this section, there is at least one standard-setting board authorised to perform functions and exercise powers in relation to standards in the category.

(3) The categories of standards are as follows:

(a) accounting standards;

(b) auditing and assurance standards;

230B Role of standard-setting board

(1) A determination under section 230 has effect as an authorisation by the Governing Council for the standard-setting board to do the following on behalf of External Reporting Australia:

(a) perform the following functions of External Reporting Australia in relation to the kinds of standards specified in the determination (to the extent they are relevant):

(i) the function under paragraph 225A(1)(a) (making standards under the Corporations Act);

(ii) the function under paragraph 225A(1)(b) (formulating other standards);

(iii) the function under paragraph 225A(1)(c) (formulating guidance);

(iv) the function under paragraph 225A(1)(d) (developing conceptual frameworks);

(v) any other functions of External Reporting Australia specified in the determination under paragraph 230(1)(c);

(b) exercise the following powers:

(i) any powers of External Reporting Australia specified in the determination under paragraph 230(1)(d) as they relate to those functions;

(ii) any powers of External Reporting Australia (other than under paragraph 225A(4)(a)) as necessary or convenient to perform those functions.

Note: Anything done on behalf of External Reporting Australia with the authority of the Governing Council is taken to have been done by External Reporting Australia: see subsection 226A(4).

(2) Two or more standard-setting boards may act jointly in the performance of functions or exercise of powers.

(3) A standard-setting board must perform any functions and exercise any powers having regard to the duties of the Governing Council as the accountable authority of External Reporting Australia for the purposes of the Public Governance, Performance and Accountability Act 2013.

Subdivision B - Standard-setting board members

231 Appointments to standard-setting board

(1) A board member is to be appointed by the Governing Council by written instrument.

Note: The board member may be reappointed: see section 33AA of the Acts Interpretation Act 1901.

(2) The board member is to be appointed on a part-time basis.

(3) The board member holds office for the period specified in the instrument of appointment. The period must not exceed 5 years.

(4) A person is not eligible for appointment as a board member unless the Governing Council is satisfied that the person is either an External Reporting Australia eligible representative or a New Zealand board representative, and has experience in, or knowledge of, at least one of the following fields:

(aa) ethics;

(a) business;

(b) financial markets;

(d) government;

(e) accounting;

(f) auditing;

(g) sustainability or climate change;

(h) science;

(i) any other field the Governing Council considers appropriate having regard to any function of External Reporting Australia under paragraph 225A(1)(i) that may be performed by the board.

(5) A person appointed as a Council member must not be appointed as a board member unless the Minister agrees in writing to the appointment.

(6) The Governing Council, in appointing a board member, must ensure, to the extent practicable, that the composition of a standard-setting board reflects an appropriate mix of persons with the qualifications, skills and experience that reflect both:

(a) the users of the kinds of standards determined for that board; and

(b) the users of materials prepared in accordance with those standards.

(7) A New Zealand board representative means an individual:

(a) appointed as the chair (or an equivalent position) of a New Zealand body (however described, including a board or committee) that has similar functions to the standard-setting board; or

(b) whose proposed appointment to that position in the New Zealand body has been publicly announced; or

(c) who is a member of the New Zealand body and nominated by the body for the purposes of the Governing Council considering the member for appointment as a board member.

231A Chair of a standard-setting board

(1) For each standard-setting board, the Governing Council must appoint, in writing, one of the board members of that board to be the Chair of that board. The appointment may be made at the same time as the appointment of that person as a board member, or at a later time.

(2) The Chair of a standard-setting board holds office until whichever first happens:

(a) the Chair's period of appointment (if any is specified) ends; or

(b) the Chair resigns the Chair's appointment in accordance with subsection 231J(2); or

(d) the Governing Council terminates the appointment of the Chair.

Note: A person may cease to be the Chair of a standard-setting board without ceasing to be a board member of that board.

231B Deputy Chair of a standard-setting board

(1) For each standard-setting board, the Governing Council may appoint, in writing, one of the board members of that board to be the Deputy Chair of that board. The appointment may be made at the same time as the appointment of that person as a board member, or at a later time.

(2) The Deputy Chair of a standard-setting board holds office until whichever first happens:

(a) the Deputy Chair's period of appointment (if any is specified) ends; or

(b) the Deputy Chair resigns the Deputy Chair's appointment in accordance with subsection 231J(3); or

(d) the Governing Council terminates the appointment of the Deputy Chair.

Note: A person may cease to be the Deputy Chair of a standard-setting board without ceasing to be a board member of that board.

231C Acting appointments

Acting Chair

(1) The Governing Council may, by written instrument, appoint a board member of a standard-setting board to act as the Chair of that board:

(a) during a vacancy in the office of the Chair of that board (whether or not an appointment has previously been made to the office); or

(b) during any period, or during all periods, when the Chair of that board:

(i) is absent from duty; or

(ii) is, for any reason, unable to perform the duties of the office.

Acting Deputy Chair

(2) The Governing Council may, by written instrument, appoint a board member of a standard-setting board to act as the Deputy Chair of that board:

(a) during a vacancy in the office of the Deputy Chair of that board (whether or not an appointment has previously been made to the office); or

(b) during any period, or during all periods, when the Deputy Chair of that board:

(i) is absent from duty; or

(ii) is, for any reason, unable to perform the duties of the office.

Acting appointments for a board member

(3) The Governing Council may, by written instrument, appoint a person to act as a board member of a standard-setting board:

(a) during a vacancy in the office of a board member of the board (whether or not an appointment has previously been made to the office); or

(b) during any period, or during all periods, when a board member of the board:

(i) is absent from duty; or

(ii) is, for any reason, unable to perform the duties of the office.

Eligibility

(4) A person must not be appointed to act as a board member of a standard-setting board unless the Governing Council is satisfied that the person is eligible for appointment as a member of the board.

Note: For rules that apply to acting appointments, see sections 33AB and 33A of the Acts Interpretation Act 1901.

231D Terms and conditions - general

A board member holds office on the terms and conditions (if any) in relation to matters not covered by this Act as the Governing Council determines in writing.

231E Remuneration - general

(1) A board member is to be paid the remuneration that is determined by the Remuneration Tribunal. If no determination of that remuneration by the Tribunal is in operation, the member is to be paid the remuneration that is prescribed under subsection (4).

(2) A board member is to be paid the allowances that are prescribed under subsection (4).

(3) This section has effect subject to:

(a) the Remuneration Tribunal Act 1973; and

(b) section 231F of this Act.

(4) The Governing Council may, by legislative instrument, prescribe:

(a) remuneration for the purposes of subsection (1); and

(b) allowances for the purposes of subsection (2).

231F Remuneration - certain board members

Determination in relation to a particular board member

(1) The Governing Council may, by writing, determine that section 231E does not apply in relation to a particular person's appointment as a board member (not including as the Chair of a standard-setting board).

(2) The determination may only be made on or before the day the instrument of appointment for the board member is made by the Governing Council.

(3) The Governing Council may, by writing, determine that the board member is to be paid the remuneration or allowances (which may be nil) specified in the determination.

(4) A determination under subsection (1) or (3) is not a legislative instrument.

Determination in relation to a class of board members

(5) The Governing Council may, by legislative instrument, determine that section 231E does not apply in relation to the appointment of board members (not including the Chair of a standard-setting board) included in a specified class.

(6) The determination does not apply to a board member whose instrument of appointment is made before the day the determination is made by the Governing Council.

(7) The Governing Council may, by legislative instrument, determine that board members to whom a determination under subsection (5) applies are to be paid the remuneration or allowances (which may be nil) specified in the determination.

Other matters

(8) Despite the Remuneration Tribunal Act 1973, a person who is a board member to whom a determination under subsection (1) or (5) of this section applies is not entitled to be paid remuneration or allowances in relation to the person's appointment as a board member, except as determined under subsection (3) or (7).

(9) Remuneration and allowances determined for a board member under subsection (3) or (7) must not exceed the remuneration and allowances that would be payable to the board member were section 231E to apply.

231G Leave of absence

The Governing Council may grant leave of absence to any board member on the terms and conditions that the Governing Council determines.

231H Disclosure of interests

(1) A disclosure by a board member (the relevant member ) under section 29 of the Public Governance, Performance and Accountability Act 2013 (which deals with the duty to disclose interests) must be made to the other board members of that standard-setting board as soon as practicable after the relevant member becomes aware of the interest, regardless of when the next meeting of that board is to be held.

(2) The board member presiding at the first meeting of that board following the making of the disclosure must:

(a) table the disclosure at that meeting; and

(b) ensure that the interest disclosed is recorded in the minutes of that meeting.

(3) Subsection (1) applies in addition to any rules made for the purposes of that section.

(4) For the purposes of this Act and the Public Governance, Performance and Accountability Act 2013, the board member is taken not to have complied with section 29 of that Act if the board member does not comply with subsection (1) of this section.

231J Resignation of appointment

(1) A board member may resign the member's appointment by giving the Governing Council a written resignation.

(2) A Chair of a standard-setting board may resign the person's appointment as the Chair of that board by giving the Governing Council a written resignation. The resignation does not affect the person's appointment as a board member.

(3) A Deputy Chair of a standard-setting board may resign the person's appointment as the Deputy Chair of that board by giving the Governing Council a written resignation. The resignation does not affect the person's appointment as a board member.

(4) A resignation given under this section takes effect on the day it is received by the Governing Council or, if a later day is specified in the resignation, on that later day.

231K Termination of appointment

(1) The Governing Council may terminate the appointment of a board member:

(a) for misbehaviour; or

(b) if the member is unable to perform the duties of the member's office because of physical or mental incapacity; or

(c) if the member makes a disclosure of information that is inconsistent with External Reporting Australia's obligation under section 234B (confidentiality); or

(e) in the case of a member who was appointed on the basis that the member was a New Zealand board representative in relation to a New Zealand body - if the member is not a member of the New Zealand body.

(2) The Governing Council must terminate the appointment of a board member of a standard-setting board if the member:

(a) becomes bankrupt; or

(b) applies to take the benefit of any law for the relief of bankrupt or insolvent debtors; or

(d) makes an assignment of the member's remuneration for the benefit of the member's creditors.

(3) The Governing Council may terminate the appointment of a board member of a standard-setting board if:

(a) the member is absent, except on leave of absence, from 3 consecutive meetings of the standard-setting board; or

(b) the member fails, without reasonable excuse, to comply with section 29 of the Public Governance, Performance and Accountability Act 2013 (which deals with the duty to disclose interests) or rules made for the purposes of that section.

Division 4 - Staff etc. of External Reporting Australia

232 Staff

(1) The staff of External Reporting Australia comprises:

(a) persons engaged under the Public Service Act 1999 for the purposes of External Reporting Australia; and

(b) such other persons (if any) as External Reporting Australia thinks necessary to employ to assist External Reporting Australia in the performance of its functions and the exercise of its powers.

(2) For the purposes of the Public Service Act 1999:

(a) the Council Chair and the APS employees assisting the Council Chair together constitute a Statutory Agency; and

(b) the Council Chair is the Head of that Statutory Agency.

(3) A person employed under paragraph (1)(b) is to be employed on the terms and conditions that External Reporting Australia determines in writing.

232A Consultants

External Reporting Australia may, on behalf of the Commonwealth, engage consultants to assist in the performance of External Reporting Australia's functions.

232B Persons assisting External Reporting Australia

External Reporting Australia may also be assisted by officers and employees of Agencies (within the meaning of the Public Service Act 1999), and of authorities of the Commonwealth, whose services are made available to External Reporting Australia in connection with the performance or exercise of any of its functions or powers.

Division 5 - Standards issued by External Reporting Australia

233 Interpretation of standards

Objects of this Part

(1) In interpreting a standard made or formulated by External Reporting Australia, a construction that wouldpromote the objects of this Part is to be preferred to a construction that would not promote those objects.

Purposes or objects of particular standard

(2) In interpreting a standard made or formulated by External Reporting Australia, a construction that would promote a purpose or object of the standard (to the extent to which it is not inconsistent with the objects of this Part) is to be preferred to a construction that would not promote that purpose or object. This is so even if the purpose or object is not expressly stated in the standard.

Other matters relating to interpretation

(3) The Minister may, by legislative instrument, determine matters relating to the interpretation of standards of a specified kind that are formulated in the performance of a function under paragraph 225A(1)(i). The determination has effect accordingly.

233A Generic and specific standards

A standard made or formulated by External Reporting Australia may:

(a) in relation to accounting standards or sustainability standards - be of general or limited application (including a limitation to specified bodies or undertakings); and

(b) in relation to auditing standards - be of general or limited application (including a limitation to different types of audit and specified industries, bodies or undertakings); and

(c) in relation to a standard of any other kind - be of general or limited application (including a limitation to different types of specified industries, bodies or undertakings); and

(d) differ according to differences in time, place or circumstance.

233B Additional considerations

(1) In making or formulating accounting standards, External Reporting Australia:

(a) must have regard to the suitability of a proposed standard for different types of entities; and

(b) may apply different accounting requirements to different types of entities; and

(c) must ensure that there are appropriate accounting standards for each type of entity that must comply with accounting standards.

(2) The accounting standards may require, for the preparation of financial reports for a period, the inclusion of comparative amounts or information for earlier periods.

(3) In making or formulating sustainability standards, External Reporting Australia:

(a) must have regard to the suitability of a proposed standard for different types of entities; and

(b) may apply different sustainability requirements to different types of entities.

(4) The sustainability standards may require, for the preparation of sustainability reports for a period, the inclusion of comparative amounts or information for earlier periods.

233C Cost/benefit analysis

(1) External Reporting Australia must carry out a cost/benefit analysis of the impact of a proposed accounting standard, proposed auditing or assurance standard or proposed sustainability standard before making or formulating the standard.

(2) External Reporting Australia has to comply with subsection (1) only to the extent to which it is reasonably practicable to do so in the circumstances.

233D Governing Council involvement in standard setting

(1) The Governing Council may, by notifiable instrument, give written directions to a standard-setting board in relation to a particular standard (including a proposed standard) if subsection (4) is satisfied.

(2) A standard-setting board must comply with a direction given to it under subsection (1).

(3) Unless subsection (4) is satisfied, the Governing Council must not make, formulate, vary or revoke a particular standard in the performance of External Reporting Australia's functions if the standard is of a kind determined for a standard-setting board under paragraph 230(1)(b).

(4) In addition to any requirements applying under Subdivision D of Division 2, the following requirements apply in relation to a decision by the Governing Council to give a direction mentioned in subsection (1), or to do an act mentioned in subsection (3):

(a) the decision is made at a meeting of the Governing Council (disregarding the effect of subsection 229G(1));

(b) the membership of the Governing Council complies with section 227 when the decision is made;

(i) the decision is made with the agreement of at least 75 percent of Council members present at the meeting, with the number of members agreeing representing a majority of all Council members entitled to vote on the proposed decision (regardless of who is present at that meeting);

(ii) the Governing Council considers that the decision is required because the standard-setting board has failed to comply with any applicable requirements of a determination under section 230;

(iii) the Governing Council considers that the decision is required to comply with its obligations as accountable authority of External Reporting Australia for the purposes of the finance law (within the meaning of the Public Governance, Performance and Accountability Act 2013).

233E Meetings relating to contents of certain standards to be held in public

A meeting of the Governing Council or a standard-setting board, or a part of one of its meetings, must be held in public if the meeting or that part of it relates to the contents of:

(a) accounting standards; or

(b) auditing and assurance standards; or

Note: For standards relating to functions specified in an instrument made by the Minister under subsection 225A(2), the instrument may specify procedural requirements, for example, dealing with whether a meeting of the Governing Council or a standard-setting board relating to those standards is to be held in public.

233F Validity of standards

A failure to comply with any of the following in relation to the making, formulating, varying or revoking of a standard does not affect the validity of the standard or, in the case of varying or revoking, the variation or revocation:

(a) this Division;

(b) procedural requirements specified under subsection 225A(2);

(c) matters specified under paragraph 230(2)(b), (c) or (d) (which deal with how a standard-setting board is to perform functions and exercise powers).

Division 6 - Miscellaneous

234 Delegation

(1) Subject to subsection (2), the Governing Council may, in writing, delegate all or any of External Reporting Australia's functions or powers to any of the following persons:

(a) a Council member;

(b) a Council associate member;

(d) a member of the staff referred to in section 232 who:

(i) is an SES employee or acting SES employee; or

(ii) holds, or is acting in a position that is equivalent to, or higher than, a position occupied by an SES employee.

(2) The Governing Council must not delegate under subsection (1) any of External Reporting Australia's functions under subsection 225A(1).

(3) A delegation under subsection (1) continues in force despite a change in the membership of the Governing Council.

(4) The delegation may be varied or revoked by the Governing Council (whether or not there has been a change in the membership of the Governing Council).

234A Code of conduct

(1) The Council Chair must determine, in writing, the External Reporting Australia Code of Conduct.

Note: Subsection 33(3) of the Acts Interpretation Act 1901 provides for the repeal, variation etc. of instruments.

(2) The External Reporting Australia Code of Conduct applies to:

(a) Council members; and

(b) Council associate members; and

(d) staff engaged under paragraph 232(1)(b); and

(e) persons whose services are made available to External Reporting Australia under section 232B.

(3) Despite subsection (2), the External Reporting Australia Code of Conduct does not apply to any persons engaged under the Public Service Act 1999.

(4) The External Reporting Australia Code of Conduct is not a legislative instrument.

234B Confidentiality

(1) External Reporting Australia must take all reasonable measures to protect, from unauthorised use or disclosure, information given to it in confidence.

(2) For the purposes of subsection (1), the disclosure of information is taken to be authorised if the disclosure:

(a) is required or permitted by a law of the Commonwealth or a prescribed law of a State or Territory; or

(b) is made in order to enable an authority or person in a country outside Australia and the external Territories to perform or exercise a function or power that corresponds, or is analogous, to any of External Reporting Australia's functions or powers; or

(c) is made to bodies that set international accounting standards, international auditing standards or international sustainability standards; or

(d) is made to the Minister; or

(e) is made to the Secretary of the Department for the purpose of advising the Minister, or an officer authorised for that purpose; or

(f) is made to ASIC for the purposes of its performance of its functions under the corporations legislation (other than the excluded provisions); or

(g) is made to APRA for the purposes of its performance of its functions; or

(h) is made to any other agency within the meaning of the Freedom of Information Act 1982, for the purposes of the performance or exercise of any of the agency's functions or powers; or

(i) is made to a member of a committee convened under Part 2 of Schedule 2 to the Corporations Act for the purposes of the performance of the committee's functions under the corporations legislation; or

(j) is made to the Disciplinary Board for the purposes of its performance of its functions under the corporations legislation; or

(k) is in accordance with the consent of the person who gave the information.

14 Paragraphs 246(1)(i) and (j)

Repeal the paragraphs, substitute:

(i) a person who is:

(i) a member of staff of External Reporting Australia engaged under section 232; or

(ii) a consultant to External Reporting Australia engaged under section 232A; or

(iii) a person whose services are made available to External Reporting Australia under 232B.

15 Paragraph 246(1)(k)

Omit "the FRC", substitute "External Reporting Australia".

16 Paragraph 246(1)(l)

Omit "the FRC", substitute "External Reporting Australia".

17 Paragraphs 246(2)(b), (c) and (d)

Repeal the paragraphs, substitute:

(b) a Council member, a Council associate member or a member of a committee or consultative group established by External Reporting Australia;

Part 2 Transitional provisions

Australian Securities and Investments Commission Act 2001

18 In the appropriate position

Insert:

Part 43 - Transitional provisions relating to Schedule 1 to the Treasury Laws Amendment (Financial Reporting System Reform) Act 2026

Division 1 - Preliminary

348 Definitions

In this Part:

amended Act means this Act as in force immediately after the start of the External Reporting Australia start day.

External Reporting Australia start day means the day on which Part 1 of Schedule 1 to the Treasury Laws Amendment (Financial Reporting System Reform) Act 2026 commences.

old Act means this Actas in force immediately before the External Reporting Australia start day.

rules means the rules made under subsection 365(1).

transition period means the period:

(a) starting on the day this Part commences; and

(b) ending on the day before the External Reporting Australia start day.

Division 2 - Matters relating to the transition period

349 Exercise of certain powers by the Financial Reporting Council during the transition period

(1) This section applies to the following powers:

(a) a power to make an instrument that will be conferred on the Governing Council of External Reporting Australia under the following provisions of the amended Act:

(i) section 230 (establishment of standard-setting board);

(ii) section 231 (appointments to standard-setting board);

(iii) section 231A (Chair of a standard-setting board);

(iv) section 231B (Deputy Chair of a standard-setting board);

(v) subsection 231E(4) (remuneration of board members generally);

(vi) section 231F (remuneration of certain board members);

(b) any power to vary or revoke an instrument mentioned in paragraph (a) as a result of the operation of subsection 33(3) of the Acts Interpretation Act 1901.

(2) For the purposes of the application of section 4 of the Acts Interpretation Act 1901 to the exercise of a power mentioned in subsection (1) during the transition period, the power may be exercised by the Financial Reporting Council as if it were a power conferred on the Financial Reporting Council by this Act.

(3) An instrument made by the Financial Reporting Council in reliance on this section and section 4 of the Acts Interpretation Act 1901 is, after the end of the transition period, taken to have been (and may be dealt with as if it had been) made by the Governing Council of External Reporting Australia.

350 Ensuring appropriate standard-setting boards are established etc.

(1) The Financial Reporting Council must take all reasonable steps to ensure that, through the exercise of powers mentioned in section 349, standard-setting boards are to be established on the External Reporting Australia start day in a manner consistent with External Reporting Australia's duty under subsection 230A(2) of the amended Act.

(2) The Financial Reporting Council has the functions of establishing standard-setting boards as mentioned in section 230 of the amended Act, and making appointments in relation to those boards, in addition to its other functions under this Act.

351 Extension of appointment - members of the Australian Accounting Standards Board and Auditing and Assurance Standards Board

(1) This section applies in relation to the following:

(a) the appointment of a member of the Australian Accounting Standards Board (including the Chair);

(b) the appointment of a member of the Auditing and Assurance Standards Board (including the Chair).

(2) If, apart from this section, the appointment would cease to have effect (other than under section 236C or 236G) at any time in the transition period, the appointment is extended until the earliest of the following:

(a) the end of the transition period;

(b) in relation to a member of the Australian Accounting Standards Board:

(i) if the member gives a resignation under section 236C - the time when that resignation takes effect;

(ii) if the extended appointment is terminated under that section - the time when that termination takes effect;

(i) if the member gives a resignation under section 236G - the time when that resignation takes effect;

(ii) if the extended appointment is terminated under that section - the time when that termination takes effect.

Division 3 - Administrative matters relating to External Reporting Australia

352 Members of the Financial Reporting Council

(1) This section applies to a person who was, immediately before the External Reporting Australia start day, holding office as a member of the Financial Reporting Council (including as the Chair).

(2) The person is taken, on and after the External Reporting Australia start day, to have been appointed as a member of the Governing Council of External Reporting Australia under section 227A of the amended Act:

(a) for the balance of the person's term of appointment that remained immediately before that day; and

(b) on terms and conditions (including remuneration) that are equal to, or better than, the terms and conditions that applied to the person immediately before that day; and

(c) for the person holding office as the Chair of the Financial Reporting Council - as the Chair of the Governing Council of External Reporting Australia.

Note: The person's remuneration will not be better than their remuneration as a member of the Financial Reporting Council under section 235A of the old Act unless a higher level of remuneration is determined by the Remuneration Tribunal.

353 Staff

(1) This section applies to a person who, immediately before the External Reporting Australia start day:

(a) was a member of the staff of the Office of the Australian Accounting Standards Board under section 235E of the old Act; or

(b) was a member of the staff of the Office of the Auditing and Assurance Standards Board under 236DC of the old Act.

(2) If the person was a member of staff engaged under the Public Service Act 1999, the person is taken, on and after the External Reporting Australia start day, to be engaged as a member of the staff of External Reporting Australia under paragraph 232(1)(a) of the amended Act on the same terms and conditions.

(3) Otherwise, the person is taken, on and after the External Reporting Australia start day, to be employed as a member of the staff of External Reporting Australia under paragraph 232(1)(b) of the amended Act on the same terms and conditions.

(4) The repeal of sections 235E and 236DC of the old Act does not affect the continuity of employment of the person.

354 Consultants

(1) This section applies to a person who, immediately before the External Reporting Australia start day, was:

(a) engaged to perform services for the Office of the Australian Accounting Standards Board under subsection 235F(1) of the old Act; or

(b) engaged to perform services for the Office of the Auditing and Assurance Standards Board under subsection 236DD(1) of the old Act.

(2) The person is taken, on and after that day, to be engaged by External Reporting Australia under section 232A of the amended Act on the same terms and conditions.

355 Persons assisting

(1) A person whose services were available to the Office of the Australian Accounting Standards Board under subsection 235F(3) of the old Act immediately before the External Reporting Australia start day is taken on and after that day to be a person whose services are made available to External Reporting Australia under section 232B of the amended Act on the same terms and conditions.

(2) A person whose services were available to the Office of the Auditing and Assurance Standards Board under subsection 236DD(3) of the old Act immediately before the External Reporting Australia start day is taken on and after that day to be a person whose services are made available to External Reporting Australia under section 232B of the amended Act on the same terms and conditions.

356 Transfer of records

(1) Records and documents covered by subsection (2) or (3) are to be transferred to External Reporting Australia on or after the External Reporting Australia start day.

Note: Any records and documents transferred are Commonwealth records for the purposes of the Archives Act 1983.

(2) This subsection covers any records or documents that were in the possession of the following immediately before the External Reporting Australia start day:

(a) the Financial Reporting Council;

(b) the Australian Accounting Standards Board;

(d) the Auditing and Assurance Standards Board.

Note: The Office of the Australian Accounting Standards Board is continued in existence as External Reporting Australia by subsection 225(1) of the amended Act.

(3) This subsection covers any records or documents that:

(a) were in the possession of the Department immediately before the External Reporting Australia start day; and

(b) were received by, or brought into existence by, the Department for the dominant purpose of performing secretariat functions for the Financial Reporting Council.

357 Additional information to be included in the Governing Council's first annual report

(1) This section applies to the first annual report prepared by the Governing Council under section 46 of the Public Governance, Performance and Accountability Act 2013.

(2) The report must, for any part of the reporting period (within the meaning of that Act) before the External Reporting Australia start day, include:

(a) the matters that would have been included in an annual report under section 235B of the old Act had that section not been repealed; and

(b) the matters that would have been included in an annual report for the Office of the Auditing and Assurance Standards Board under section 46 of the Public Governance, Performance and Accountability Act 2013.

358 Corporate plans

(1) A corporate plan for the body continued (or to be continued) in existence as External Reporting Australia is not required to be prepared, given or published for a reporting period for the body until it is reasonably practicable to do so after the External Reporting Australia start day if:

(a) the External Reporting Australia start day occurs (or is to occur) during the reporting period; and

(b) as at the start of the transition period, a corporate plan for the body for the reporting period has not yet been prepared.

(2) A corporate plan for the Office of the Auditing and Assurance Standards Board is not required to be prepared, given or published for a reporting period for the Office if:

(a) the External Reporting Australia start day is to occur during the reporting period; and

(b) as at the start of the transition period, a corporate plan for the Office for the reporting period has not yet been prepared.

(3) This section has effect despite:

(a) section 35 of the Public Governance, Performance and Accountability Act 2013; and

(b) any rules made for the purposes of that section.

(4) In this section:

corporate plan means a corporate plan under section 35 of the Public Governance, Performance and Accountability Act 2013.

reporting period has the same meaning as in the Public Governance, Performance and Accountability Act 2013.

359 Application provision - disclosure of information

Section 234B of the amended Act applies in relation to the disclosure of information on or after the External Reporting Australia start day, whether the information was given (or is taken to have been given) to External Reporting Australia before, on or after that day.

Division 4 - Certain instruments and standards, and things done by bodies, etc.

360 Transitional - references to bodies in instruments

(1) This section applies to an instrument (other than an instrument of appointment) if:

(a) the instrument was in force immediately before the External Reporting Australia start day; and

(b) the instrument contains a reference to:

(i) the Financial Reporting Council; or

(ii) the Australian Accounting Standards Board; or

(iii) the Auditing and Assurance Standards Board; or

(iv) the Office of the Auditing and Assurance Standards Board.

Note: See section 25B of the Acts Interpretation Act 1901 in relation to references to the Office of the Australian Accounting Standards Board.

(2) The instrument has effect, on and after the External Reporting Australia start day, as if the reference were a reference to External Reporting Australia.

(3) The rules may provide that subsection(2) does not apply in relation to a specified instrument.

(4) This section does not prevent the instrument from being amended or repealed on or after the External Reporting Australia start day.

361 Things done by, or in relation to, bodies

(1) If, before the External Reporting Australia start day, a thing was done by, or in relation to, a body mentioned in subsection (2), then the thing has effect, on and after that day, as if it had been done by, or in relation to, External Reporting Australia.

(2) The bodies are the following:

(a) the Financial Reporting Council;

(b) the Australian Accounting Standards Board;

(d) the Office of the Auditing and Assurance Standards Board.

(3) Subsection (1) does not apply to the making of an instrument under section 349.

(4) The rules may provide that subsection (1) does not apply in relation to a specified thing done by, or in relation to, a specified body.

362 Continuation of certain standards formulated by the Australian Accounting Standards Board and the Auditing and Assurance Standards Board

A standard in force for the purposes of paragraph 227(1)(c) or (ca) or 227B(1)(b) of the old Act immediately before the External Reporting Australia start day continues in force (and may be dealt with) on and after that day as if it were a standard formulated by External Reporting Australia for the purposes of subparagraph 225A(1)(b)(iii) of the amended Act.

Note: For the continuation of standards made under the Corporations Act 2001, see section 1737 of that Act.

Division 5 - Miscellaneous

363 Saving provision - qualified privilege

Subsections 225A(3) and (4) of the old Act, as in force immediately before the External Reporting Australia start day, continue to apply on and after that day in relation to a disclosure made in response to a notice given under subsection 225A(1) of the old Act before that day.

364 Saving provision - liability for damages

Despite the amendments made by Part 1 of Schedule 1 to the Treasury Laws Amendment (Financial Reporting System Reform) Act 2026, section 246 of the old Act continues to apply on and after the External Reporting Australia start day in relation to an act done or omitted before that day.

365 Transitional rules

(1) The Minister may, by legislative instrument, make rules prescribing matters:

(a) required or permitted by this Part to be prescribed by the rules; or

(b) necessary or convenient to be prescribed for carrying out or giving effect to this Part.

(2) Without limiting subsection (1), the rules may prescribe matters of a transitional nature (including prescribing any saving or application provisions) relating to the amendments or repeals made by Part 1 of Schedule 1 to the Treasury Laws Amendment (Financial Reporting System Reform) Act 2026.

(3) To avoid doubt, the rules may not do the following:

(a) create an offence or civil penalty;

(b) provide powers of:

(i) arrest or detention; or

(ii) entry, search or seizure;

(d) set an amount to be appropriated from the Consolidated Revenue Fund under an appropriation in this Act;

(e) directly amend the text of this Act.

(4) This Part (other than subsection (3)) does not limit the rules that may be made for the purposes of subsection (1).

Part 3 Consequential amendments

Airports Act 1996

19 Subsection 141(7) (heading)

Omit "AASB accounting standards", substitute "External Reporting Australia accounting standards".

20 Subsection 141(7)

Omit "AASB accounting standard", substitute "External Reporting Australia accounting standard".

21 Subsection 141(7)

Omit " AASB accounting standard ", substitute " External Reporting Australia accounting standard ".

22 Subsection 141(7)

Omit "the Australian Accounting Standards Board", substitute "External Reporting Australia".

Australian Charities and Not-for-profits Commission Act 2012

23 Section 300-5 (definition of auditing standard)

Repeal the definition, substitute:

auditing standard , in relation to an audit or review, means any standard issued by External Reporting Australia that applies to the audit or review, as in force from time to time.

Corporations Act 2001

24 Section 9 (definition of AASB)

Repeal the definition.

25 Section 9 (definition of AUASB)

Repeal the definition.

26 Subsection 334(1) (heading)

Omit "AASB's", substitute "External Reporting Australia's".

27 Subsection 334(1)

Omit "The AASB", substitute "External Reporting Australia".

28 Subsection 336(1) (heading)

Omit "AUASB's", substitute "External Reporting Australia's".

29 Subsection 336(1)

Omit "The AUASB", substitute "External Reporting Australia".

30 Paragraph 336(4)(a)

Omit "the AUASB", substitute "External Reporting Australia".

31 Paragraph 336(5)(a)

Omit "the AUASB", substitute "External Reporting Australia".

32 Subsection 336A(1)

Omit "The AASB", substitute "External Reporting Australia".

33 Subsection 338(1)

Omit "the AASB or the AUASB", substitute "External Reporting Australia".

34 Subsection 1707E(2) (heading)

Omit "AUASB", substitute "External Reporting Australia".

35 Subsection 1707E(2)

Omit "The AUASB", substitute "External Reporting Australia".

36 Subsection 1707E(4)

Omit "the AUASB", substitute "External Reporting Australia".

37 Subsection 1707F(1)

Omit "the AUASB", substitute "External Reporting Australia".

38 In the appropriate position in Chapter 10

Insert:

Part 10.84 - Application and transitional provisions relating to the Treasury Laws Amendment (Financial Reporting System Reform) Act 2026

1736 Definitions

In this Part:

amending Part means Part 3 of Schedule 1 to the Treasury Laws Amendment (Financial Reporting System Reform) Act 2026.

1737 Saving provisions - standards

(1) An accounting standard made by the Australian Accounting Standards Board under section 334 and in force immediately before the commencement of the amending Part continues in force (and may be dealt with) on and after that commencement as if it were an accounting standard made by External Reporting Australia under that section as amended by that Part.

(2) An auditing standard made by the Auditing and Assurance Standards Board under section 336 and in force immediately before the commencement of the amending Part continues in force (and may be dealt with) on and after that commencement as if it were an auditing standard made by External Reporting Australia under that section as amended by that Part.

(3) A sustainability standard made by the Australian Accounting Standards Board under section 336A and in force immediately before the commencement of the amending Part continues in force (and may be dealt with) on and after that commencement as if it were a sustainability standard made by External Reporting Australia under that section as amended by that Part.

1738 Transitional provision - other documents

Section 338, as in force immediately before the commencement of the amending Part, continues to apply on and after that commencement in relation to:

(a) a document that purports to be published by, or on behalf of, the Australian Accounting Standards Board or the Auditing and Assurance Standards Board before that commencement; or

(b) a copy of such a document (whether the copy is made before, on or after that commencement).

Fair Work (Registered Organisations) Act 2009

39 Section 6 (paragraph (a) of the definition of Australian Accounting Standards)

Omit "the Australian Accounting Standards Board", substitute "External Reporting Australia".

40 Section 6 (paragraph (b) of the definition of Australian Accounting Standards)

Omit "the Australian Accounting Standards Board", substitute "External Reporting Australia".

Income Tax Assessment Act 1997

41 Subsection 25-110(3)

Omit "the Australian Accounting Standards Board", substitute "External Reporting Australia".

42 Paragraph 715-375(1)(b)

Omit "the Australian Accounting Standards Board", substitute "External Reporting Australia".

43 Paragraph 715-379(1)(b)

Omit "the Australian Accounting Standards Board", substitute "External Reporting Australia".

44 Section 995-1 (paragraph (b) of the definition of accounting principles)

Omit "the Australian Accounting Standards Board", substitute "External Reporting Australia".

45 Section 995-1 (paragraph (b) of the definition of auditing principles)

Omit "the Auditing and Assurance Standards Board", substitute "External Reporting Australia".

Public Governance, Performance and Accountability Act 2013

46 Section 8 (definition of accounting standards)

Omit "the Australian Accounting Standards Board", substitute "External Reporting Australia".

Recycling and Waste Reduction Act 2020

47 Subsection 108(3)

Omit "the Auditing and Assurance Standards Board", substitute "External Reporting Australia".

48 Subsection 109(3)

Omit "the Auditing and Assurance Standards Board", substitute "External Reporting Australia".

Superannuation Industry (Supervision) Act 1993

49 Subparagraph 128F(c)(ii)

Omit "the Auditing and Assurance Standards Board", substitute "External Reporting Australia".

50 Subparagraph 128F(c)(iii)

Omit "the Auditing and Assurance Standards Board under section 227B", substitute "External Reporting Australia under section 225B".