Yesterday the Australian government announced its decision to consolidate the country’s three accounting standards bodies into a single entity. This move, announced by Treasurer Jim Chalmers at ASIC’s annual forum in Melbourne, represents the largest reform to the standard-setting bodies in decades.
The Australian Accounting Standards Board, the Auditing and Assurance Standards Board, and the Financial Reporting Council will be combined into a single body from 2026, subject to the passage of legislation. Beyond setting accounting and auditing standards, this new integrated entity will also support the ongoing implementation of climate-related financial disclosure standards in Australia. The “new integrated body [would] better support the ongoing implementation of climate-related financial disclosure standards in Australia,” Dr Chalmers said.
The move has received mixed reviews from the accounting sector. Liberal senator Richard Colbeck warns against excluding certain groups from serving on the combined body. He believes the accounting sector needs to be consulted on the details of the move and warns against repeating past mistakes. Chartered Accountants ANZ, the main professional body, complained that the announcement was made without first consulting the sector. Labor senator Deborah O’Neill was supportive of the move stating that merging the “bodies into a single entity will streamline Australia’s regulatory infrastructure, minimise bureaucracy and increase regulatory consistency.”
High level commentary aside, this reform acknowledges the crucial role accountants will need to play in GHG accounting and the climate related financial disclosures that this accounting will form part of. It also highlights the need for a more streamlined and consistent approach to reporting and regulation in the face of the ongoing climate crisis.
The joint media release reads as follows:
The Albanese Government will restructure the nation’s financial reporting bodies to make them more efficient, effective and fit for purpose, including to assist Australia in implementing new climate and sustainability standards.
The three bodies that currently oversee financial reporting and set reporting standards – the Australian Accounting Standards Board (AASB), the Auditing and Assurance Standards Board and the Financial Reporting Council – will be combined into a single entity.
In addition to accounting and auditing standards, this new integrated body will better support the ongoing implementation of climate‑related financial disclosure standards in Australia. It is intended that the body will be operational on or after 1 July 2026, subject to the passage of legislation.
Business, investors and other stakeholders will benefit from engaging with a single entity, helping to increase regulatory consistency, reduce red tape and unnecessary costs and avoid duplication.
The Government will finalise the details of the governance arrangements for the new entity and will release draft legislation for public consultation, including appropriate transitional arrangements.
Ahead of the body’s formation, the AASB will continue to progress its work in relation to climate‑related financial disclosure standards. Establishing a framework for sustainability‑related financial disclosures is a key priority in the Government’s draft Sustainable Finance Strategy.
The streamlining of the nation’s financial reporting architecture is part of our broader efforts to reform, renew and refocus the nation’s economic agencies.
The Albanese Government is committed to ensuring we have the right leadership, structures and processes in place at our key economic institutions to meet current and future challenges.