Australian Securities and Investments Commission (Financial Reporting Council – Member) Appointment (No. 1) 2022

Overview

The Australian Securities and Investments Commission (Financial Reporting Council – Member) Appointment (No. 1) 2022I, enacted on 25 March 2022 by Michael Sukkar, Assistant Treasurer, Minister for Housing, and Minister for Homelessness, Social and Community Housing, aims to address a gap in the composition of the Financial Reporting Council by appointing a new member. The need for this legislation arose to ensure the continued effective oversight and governance within the financial sector, specifically in the area of financial reporting and auditing standards. Under the authority granted by subsections 235A(1) and 235AA(6) of the Australian Securities and Investments Commission Act 2001, the appointment of William (Bill) Edge as a part-time member of the Financial Reporting Council is intended to bolster the council's capacity to deliver on its policy objectives, particularly in relation to maintaining and improving the integrity of financial reporting and auditing standards in Australia.

Scope and Application

The Australian Securities and Investments Commission (Financial Reporting Council – Member) Appointment (No. 1) 2022I applies to the appointment of William (Bill) Edge as a part-time member of the Financial Reporting Council (FRC). This appointment, under subsections 235A(1) and 235AA(6) of the Australian Securities and Investments Commission Act 2001, is effective from 29 July 2022 and will conclude on the earlier of 30 June 2023 or the date William (Bill) Edge ceases to be the Chair of the Auditing and Assurance Standards Board. The Act, which is a Commonwealth instrument, governs the FRC’s oversight of financial reporting and auditing standards in Australia, impacting entities and industries that rely on these standards. The appointment is subject to the legislative provisions of the Act and does not explicitly outline exclusions or exemptions beyond the stated duration and conditions of the appointment. Subordinate instruments may further define the scope and responsibilities of the FRC and its members.

Key Provisions

The main operative sections of the notifiable instrument (F2022N00069) concern the appointment of William (Bill) Edge as a member of the Financial Reporting Council (FRC). Section 1 of the instrument provides the appointment of Mr Edge, effective from 29 July 2022, and outlines his role on a part-time basis. The appointment is valid until the earlier of 30 June 2023 or the date Mr Edge ceases to be the Chair of the Auditing and Assurance Standards Board (section 2). This appointment is made under subsections 235A(1) and 235AA(6) of the Australian Securities and Investments Commission Act 2001 (the Act). The Act imposes certain obligations on the parties involved. Mr Edge, as a member of the FRC, must adhere to the council’s governance framework and contribute to the oversight of financial reporting standards and practices in Australia. His dual role as Chair of the Auditing and Assurance Standards Board necessitates a commitment to ensuring the integrity and quality of auditing and assurance standards. The instrument highlights that his FRC membership will conclude if he ceases to hold the position of Chair of the Auditing and Assurance Standards Board, ensuring alignment between these two roles. Non-compliance with the obligations set forth in the Act could result in various consequences. Under the Act, there are potential civil and criminal penalties for breaches of the statutory duties of directors, officers, and other relevant personnel. For example, breaches of fiduciary duties, improper use of position, or dishonest conduct could lead to significant penalties, including fines and imprisonment. The maximum penalties vary depending on the specific nature of the breach but are designed to enforce accountability and integrity within the financial reporting and auditing sectors. In summary, the notifiable instrument (F2022N00069) appoints William (Bill) Edge to the Financial Reporting Council, detailing his part-time role and the conditions under which his appointment will end. The obligations imposed on Mr Edge include adherence to the FRC’s governance and ensuring alignment with his role as Chair of the Auditing and Assurance Standards Board. Failure to meet these obligations could result in civil or criminal penalties as stipulated under the Australian Securities and Investments Commission Act 2001.