Monday, 7 December 2009 
 
 
The Institute of Chartered Accountants in Australia (the Institute) supports the introduction of the Corporations Amendment (Corporate Reporting Reform) Bill 2009 announced by the Hon Chris Bowen MP last week.  
 
“The Institute welcomes the Bill and would like to see these positive reforms introduced as soon as possible. The reforms mean that the regulatory burden for many corporates, including very small not-for-profit companies will be reduced,” said Kerry Hicks, Head of Reporting at the Institute. 
 
“It is pleasing to see our efforts over several years have resulted in these major reforms. The announcement is an example of the work that can be achieved through continued influencing efforts by the Australian accounting profession as a whole,” said Ms Hicks.  
 
The areas of reduced cost and complexity in the Bill include: 
 
- Introducing a three tiered differential reporting regime for not-for-profit limited by guarantee companies, whereby certain entities do not need to have an audit or produce financial statements in compliance with accounting standards 
 
- Changing the dividends test to a more flexible test based on the solvency  
 
- Removing the need for complete parent entity financial statements 
 
- Providing greater flexibility for companies to change their year ends.  
 
 
”While the reporting relief for the not-for-profit sector is reduced, transparency and good governance is maintained and even improved. The simplified directors’ report will become more focused on how the activities of the entity during the year linked to strategies and objectives of the organisation, and how the entity measures performance,” Ms Hicks said. 
 
Other areas refining current requirements include the improvement of non-financial information in the company’s directors’ report, refining the statement of compliance with the International Financial Reporting Standards (IFRS) contained in the directors’ declaration and providing protection from disclosure in respect of solicitors’ representation letter provided to auditors as part of audit evidence with performing an external audit. 
 
The Institute will be working closely with the government during the consultation period which concludes in early February. It is expected that the reforms will be available in the current financial year ending 30 June 2010.  
 
Ends  
 
Media enquiries please contact  
Ben McAlary  
Institute of Chartered Accountants in Australia  
9290 5586