CPA Australia Financial Reporting Lead Ram Subramanian has commented on draft legislation to create a new body, External Reporting Australia, which will consolidate the Australian Accounting Standards Board (AASB), Auditing and Assurance Standards Board (AUSB), and Financial Reporting Council (FRC).
The proposed legislation outlines the governance, structure and operational framework for the unified organisation, including the establishment of dedicated technical boards focused on accounting, assurance, auditing and sustainability standards.
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The draft also covers the powers and functions of the new body as well as transitional arrangements.
Subramanian said: “We welcome the proposals for the establishment of a new standard-setting board with responsibility for sustainability reporting standards. This is something CPA Australia has long advocated for.
“We welcome the proposal to remove the current function of providing strategic policy advice and reports on audit quality, and any mandatory investigation powers. This role is already carried out by ASIC to a great extent.”
Subramanian highlighted a key area of concern about the extent of authority granted to the proposed governing council.
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By GlobalDataHe stated that “the proposed governing council appears to be vested with too much power presently,” emphasising the need for sufficient oversight regarding decisions such as the composition of standard-setting boards and the roles and responsibilities of board chairs.
He also questioned the adequacy of checks and balances in the new structure.
Specifically, he noted uncertainty about how suitable oversight would be maintained amid potential bifurcation of technical activities within the new boards, while overall accountability would remain with the governing council.
Subramanian added: “The devil is going to be in the detail of the legislative instruments that will create the new technical standard-setting boards for financial reporting, sustainability reporting and audit & assurance.
“We look forward to contributing to engaging on the shaping of subordinate law on this critical aspect of the new structure.”
Prior to this, CPA Australia expressed support for the Taxation Ombudsman’s 2026 Refreshed Work Plan, describing it as a timely and well-considered response to the practical challenges faced by taxpayers, advisers, and small businesses across the country.
