Purpose of the FRP
The Financial Reporting Panel (FRP) was established under the Corporate Law and Economic Reform Program (Audit Reform and Corporate Disclosure) Act 2004.
The FRP's function is to resolve disputes between ASIC and companies concerning accounting treatments in their financial reports.
The FRP was established to remove the need to initiate legal proceedings in Court in order to resolve disputes about financial reporting matters. The FRP is designed to provide an efficient and cost effective way of dealing with disputes, the opportunity to be heard by persons with relevant expertise, and remove concerns of courts' limited understanding of accounting standards.
Referrals to The FRP may be lodged by either ASIC or the company. A company must acquire ASIC's consent to the referral before lodging an application with FRP.
Referrals must be made in the form prescribed by the Corporations Act 2001, subsections 323EF(2) or 323EI(2).
Upon receipt of an application, the FRP will consider whether the application is within its jurisdiction and whether it will commence proceedings. If it commences proceedings the Chairperson will appoint 3 members, who are free of any material conflict, to be the sitting panel.
The FRP proceedings take place in private. However, the lodging entity may request in writing that the proceedings take place in public. The FRP will then decide if it is appropriate to do so.
If, during proceedings, the FRP deems certain material too sensitive to be made public, FRP is empowered by subsection 239CD(1) of the ASIC Act 2001, to restrict publication of such material.
From the date of referral, the FRP has 60 days to consider and report on the financial report (subsection 323EK(6) of the Corporations Act). Should the FRP require an extension, it may receive another 30 days by notifying the parties to the proceedings within 60 days after the referral day.
Following the conclusion of a matter, the FRP must provide a copy of its findings to the parties involved and the market operator, if the financial report of the involved party is a listed company or listed registered scheme.
The FRP has the power to dismiss a referral at any stage of the proceeding, particularly if the matter is being or likely to be, dealt with in Court.
Findings by the FRP will not be binding on either ASIC or the company and the dispute may be pursued in Court. However, the Court may consider the FRP's findings in determining whether the company complied with the relevant accounting standards.
The FRP is regulated by two separate Acts, being:
- Part 2M.3 of the Corporations Act, which provides the relevant powers for the FRP to conduct proceedings, and
- Part 13 of the ASIC Act, which provides the mechanics for the FRP to operate.
The FRP is empowered by subsection 239CH(1) of the ASIC Act to determine the procedural rules to be followed in proceedings.
The FRP may consider drafting an initial set of rules for proceedings and prior to finalisation, it may invite interested parties to submit their comments on the proposed rules.
The Department of the Treasury assists the FRP's members in managing the workload and assist in the administration of its functions.
An annual budget is determined by the Department of the Treasury and allocated to the FRP.
Under section 239AM of the ASIC Act, the FRP must prepare and give to the Minister an annual report describing its operations for that financial year.
The Minister is responsible for appointing the FRP's members (section 239AB of the ASIC Act) and the Chairperson (section 239AC of the ASIC Act). There must be a minimum of five members. They are active members of the business community, with knowledge and/or experience in accounting, auditing, business, administration of companies and law. The terms of membership must not exceed 5 years.
Disclosure of Interests
A member must complete a declaration of interests when invited to sit on a matter. The declaration of interests is made available to the parties involved in the matter. Should conflict of interest arise, the member will have to stand down and not participate in the matter. The Chairperson will appoint another member to the sitting panel.
Protection of Members
Under subsection 239CI(1) of the ASIC Act, a member has, whilst exercising his or her powers and functions during the course of the FRP proceedings, the same protection and immunity as a Justice of the High Court.
Remuneration and Allowances
Remuneration and allowances for members are determined by the Remuneration Tribunal. Daily fees are payable following the completion of a matter or attending a members roundtable meeting. Allowances are payable to members who must undertake overnight travel.
The current members were appointed for terms ending 11 July 2011. Current members are listed on the Members page.