AICD submission to the Senate Inquiry into Treasury Laws Amendment (Financial Reporting System Reform) Bill 2026

The AICD supports the creation of a fit-for-purpose, internationally aligned, strongly governed body that can oversee high quality corporate reporting, including the development of standards.

AICD’s submission builds on our views expressed in our earlier submissions to Treasury’s consultations in November 20251 and February 20252 along with engagement from AICD’s Reporting Committee. We reiterate several points which would strengthen the establishment of External Reporting Australia (ERA), including increasing the size of the Governing Council membership, reflecting the learnings from the Briggs Review into Public Sector Board Appointments (Briggs Review), and implementing a post-implementation review of the legislation, in line with better policymaking principles.

Key points included:

• Governing Council membership - The AICD recommends lifting the upper limit of the Governing Council to 12 members to help achieve the design principle of allowing greater flexibility for ERA to meet future governance needs.

• Non-voting associate members – The AICD recommends amending the Explanatory Memorandum to provide more detail on which ‘unique circumstances’ may warrant the need to appoint a non-voting associate member. It may reduce governance complexity to simply allow a larger Governing Council.

• Appointments – The AICD recommends making the board skills matrix for ERA publicly available, in line with principle of transparency, as outlined in the Australian Government Appointments Framework.

• Post-implementation review – The AICD strongly recommends the inclusion of a statutory post-implementation review of ERA to ensure it is working as intended (for example, after five years).

• Cost/benefit analysis – The AICD recommends specifying that the ERA must conduct a periodic cost/benefit analysis of the collective stock of standards to ensure the volume of regulatory burden on entities is necessary and proportionate.

• Broader reforms – The AICD recommends the Government release the outcomes of the 2024 Treasury consultation on the regulation of accounting, auditing and consulting firms in Australia.