CPA Australia says a red-tape reduction bill
that is intended to improve Australia’s corporate reporting
framework is excellent news for big business and not-for-profit
corporates, but not for small business.
The Corporations Amendment (Corporate
Reporting Reform) Bill 2010 and accompanying Regulations were put
before Australia’s parliament late last month.
The reforms are intended to provide relief
from red-tape for Australian companies and implement a number of
other changes to the corporate regulatory framework.
But CPA Australia says there will be
additional compliance obligations for small proprietary companies
when they want to pay dividends.
These relate to the link in the draft bill between the requirement
to use accounting standards and the calculation of net assets, as
small proprietary companies do not lodge audited financial
statements prepared in accordance with accounting standards with
the corporate regulator.
CPA Australia and the Institute of Chartered Accountants in
Australia are encouraging the government to consider these issues
before finalising the bill, as about 1.5 million small businesses
will be affected.
CPA Australia said it supports the following
areas on red-tape relief:
- Financial reporting relief to select
not-for-profit entities, which will relieve up to 47 percent of
entities from preparation, lodgement and audit of financial reports
allowing them to focus on service delivery rather than compliance
- Relief from the preparation of parent
entity financial statements for corporates, including listed
entities, replaced instead with minimal note disclosure;
- Improved flexibility in changing year
- Changing the dividends test from a
‘profits test’ to a ‘net assets solvency test’, similar to that
existing in New Zealand.