The Australian Treasurer Peter Costello and New Zealand Minister of Commerce Lianne Dalziel today welcomed the initiatives that will ensure that Australia and New Zealand continue to work closely together on financial reporting issues.
At the inaugural joint meeting of the Australian and New Zealand accounting standard setting bodies in May 2006, the Chair of the Australian Accounting Standards Board (AASB), Professor David Boymal, and the Chair of the New Zealand Financial Reporting Standards Board (FRSB), Ms Joanna Perry, signed a protocol of cooperation on accounting standards. The protocol aims to minimise differences between the accounting standards in Australia and New Zealand. This follows from initiatives last year to promote greater communication between the standard setting bodies through cross-appointments.
Australia and New Zealand are also working together on a number of other financial reporting issues that will seek to further assist trans-Tasman companies by aligning regulatory frameworks. These initiatives include a review of the differences in the auditing regulation frameworks between the countries and an analysis of the broader legislative requirements in relation to financial reporting. This work is being progressed by the Trans-Tasman Accounting Standards Advisory Group that was established by the Australian Treasurer and the New Zealand Minister of Finance in 2004.
The Ministers welcomed these initiatives and congratulated the accounting standard setting bodies for their contribution towards establishing a single economic market between Australia and New Zealand. The Ministers noted that aligning financial reporting frameworks would assist in reducing the compliance costs for businesses with trans-Tasman operations and help to promote investment between the jurisdictions.
Background
The protocol of cooperation between the AASB and the FRSB aims to:
- minimise the differences between accounting standards issued in Australia and New Zealand;
- ensure that the AASB and the FRSB present similar positions at international forums to maximise influence; and
- ensure that staff resources are shared to the fullest extent practicable and possible.
The protocol represents part of an ongoing process to harmonise trans-Tasman accounting standards and financial reporting requirements. To date this process has involved:
- the formation of the Trans-Tasman Accounting Standards Advisory Group, which has the power to make recommendations to the Australian and New Zealand governments on means of harmonising accounting standards on each side of the Tasman;
- cross-appointments between the AASB and the FRSB, which have involved the Chairs of each Board being appointed to the other Board; and
- cross-appointments between the Financial Reporting Council (which, amongst other things, oversees the accounting standards making process in Australia) and the Accounting Standards Review Board (which approves accounting standards in New Zealand). These cross-appointments have involved the Chairs of each entity being appointed to the other entity.