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Chapter 1
Scrutiny of annual reports
1.1
The Parliamentary Joint Committee on Corporations and Financial Services
is established by Part 14 of the Australian Securities and Investments Commission
Act 2001 (the ASIC Act). Section 243 specifies the committee's duties,
which include:
(b) to examine each annual report that is prepared by a body
established by this Act and of which a copy has been laid before a House, and
to report to both Houses on matters that appear in, or arise out of, that
annual report and to which, in the Parliamentary Committee's opinion, the
Parliament's attention should be directed...
1.2
This report is presented in fulfilment of the committee's duties under
subsection 243(b).
1.3
The ASIC Act establishes 10 bodies, namely:
- Auditing and Assurance Standards Board (AUASB);
- Australian Accounting Standards Board (AASB);
- Australian Securities and Investments Commission (ASIC);
-
Companies Auditors and Liquidators Disciplinary Board (CALDB);
- Corporations and Markets Advisory Committee (CAMAC);
- Financial Reporting Council (FRC);
- Financial Reporting Panel (FRP);
- Office of the Australian Accounting Standards Board (Office of
the AASB);
-
Office of the Auditing and Assurance Standards Board (Office of
the AUASB); and
- Takeovers Panel.
1.4
Collectively, these bodies form the 'administrative organs' of the
national financial services regulatory scheme established by the ASIC Act and
the Corporations Act 2001.[1]
1.5
While ten bodies are established under the ASIC Act, only eight annual
reports are prepared. The ASIC Act directs that one annual report will cover
both the AASB and the Office of the AASB.[2]
Similarly, the AUASB is required to prepare an annual report that addresses its
activities and the activities of the Office of the AUASB.[3]
1.6
The annual report of ASIC is not considered in this report. The
committee routinely examines the annual reports prepared by ASIC as part of the
committee's ongoing oversight of the Commission.
1.7
Accordingly, this report examines the 2011–12 annual reports of the
AASB, the AUASB, CALDB, CAMAC, the FRC, the FRP and the Takeovers Panel.
1.8
Effective as of 1 October 2012, provisions in the Australian Securities
and Investments Commission Act 2001 and the Corporations Act 2001 which
established the FRP were repealed. While ceasing operation the Committee will
consider the annual report for the FRP's operations during the 2011-12
financial year.[4]
1.9
The committee notes that the annual reports of bodies established under
the ASIC Act are also the subject of scrutiny by the Senate Economics
Legislation Committee. Senate Standing Order 25(20) requires the Economics
Committee to:
(a) Examine each annual report referred to it and report to
the Senate whether the report is apparently satisfactory.
(b) Consider in more detail, and report to the Senate on,
each annual report which is not apparently satisfactory, and on the other
annual reports which it selects for more detailed consideration.
(c) Investigate and report to the Senate on any lateness in
the presentation of annual reports.
(d) In considering an annual report, take into account any
relevant remarks about the report made in debate in the Senate.
(e) If the committee so determines, consider annual reports
of departments and budget-related agencies in conjunction with examination of
estimates.
(f) Report on annual reports tabled by 31 October each year
by the tenth sitting day of the following year, and on annual reports tabled by
30 April each year by the tenth sitting day after 30 June of that
year.
(g) Draw to the attention of the Senate any significant
matters relating to the operations and performance of the bodies furnishing the
annual reports.
(h) Report to the Senate each year whether there are any
bodies which do not present annual reports to the Senate and which should
present such reports.
1.10
Therefore, in conducting its review of the annual reports of bodies
established under the ASIC Act, the committee will focus on operational matters
of key interest and raise urgent matters that in the committee's opinion
Parliament should consider. Chapter two examines the annual reports of CALDB,
CAMAC the FRP and the Takeovers Panel. Chapter three assesses the annual
reports of the three agencies established by Part 12 of the ASIC Act to oversee
the administration of the financial services: the AASB, the AUASB and the FRC.
1.11
In reviewing the annual reports, the committee will also consider
whether there are opportunities to strengthen the operation of the corporations
legislation.
1.12
The committee did not hold any public hearings or seek written
submissions during the preparation of this report.
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