Overview of the FRP

Role and functions of the FRP

The FRP commenced operations in July 2006. The Panel is established under the CLERP 9 Act and provides an alternative dispute resolution mechanism to determine contested issues between ASIC and entities concerning the application of accounting standards and the 'true and fair' view requirement in financial reports.

Prior to the establishment of the FRP, the only method for resolving these disputes was through legal action between ASIC and the entity, which has the potential to be both a costly and a lengthy process. The FRP provides a more timely avenue for resolving these cases (the Corporations Act requires the FRP to determine cases within 60 days of the matter being referred to the Panel). In addition, matters referred to the FRP are considered by people experienced in accounting matters, helping to reduce the cost of handling these disputes and facilitating more appropriate outcomes.

A similar regime is also in place in the United Kingdom, where accounting disputes are heard by the Financial Reporting Review Panel in the first instance rather than the courts.

Referrals to the FRP

Disputes between ASIC and an entity concerning a financial report can be referred to the FRP by:

ASIC, after giving the entity whose financial report is considered deficient 14 days to respond to a notice stating ASIC's intention to refer the matter to the FRP and the reason for doing so and any changes necessary to correct the financial report; or
an entity, where ASIC has informed the entity that its financial report does not comply with the Corporations Actand ASIC has consented to the referral to the FRP.

The FRP has the power to dismiss a referral at any stage.

Status of an FRP report

A report of the FRP on whether a financial report complies with the financial reporting requirements of the Corporations Act is not binding. However, ASIC has publicly stated that it will support the findings of the FRP and a court may have regard to the FRP's report in determining whether the entity's financial report complies with the Corporations Act.

The FRP is required to give a copy of its report to ASIC and the entity. If the entity is listed, a copy must also be given to the relevant market operator (usually the Australian Securities Exchange). ASIC also 'must take such steps as it considers reasonable and appropriate' to publicise the FRP's report and whether the entity has made the changes to its financial report (if any) recommended by the FRP.

Panel members

The Panel is comprised of part‑time members with knowledge or experience in accounting, auditing, business, company administration or law. All appointments are made by the responsible Minister.

As at 30 June 2009, the Panel comprised nine members including the Chairman (details below). During the period, the previous Chairman, Mr Paul Shannon, resigned from the Panel. Mr Ken McKenzie was appointed as the new Chairman. Professor David Boymal and Messrs Roger Cotton and Bill Palmer were appointed to the Panel during the period. The terms of all appointments expire on 30 June 2010.

Mr Ken McKenzie, Chairman

Mr McKenzie has substantial experience in the manufacturing, distribution and marketing of consumer products industry. He is the Chief Financial Officer — Statutory and Compliance at Coca‑Cola Amatil Ltd and previously held the positions of Group Controller and Corporate Planning Manager. He has been extensively involved in mergers and acquisitions and business reorganisation. Recently, he participated in the International Accounting Standards Group (a group that acted as an avenue for dialogue between the Government and other stakeholders on issues surrounding the adoption of International Accounting Standards). He is also the current Chair of the ASIC Standing Committee — Accounting and Auditing.

Prior to joining Coca‑Cola Amatil Ltd, he worked with the Reckitt and Colman Group in key senior financial positions across various businesses.

Professor David Boymal

Professor Boymal has extensive experience in standard‑setting over the last 20 years as the immediate past Chairperson of the Australian Accounting Standards Board and a member of the International Accounting Standards Committee, the Urgent Issues Group and International Federation of Accountants. He is Adjunct Professor of Accounting at RMIT University and a past National President of CPA Australia. He is a past senior partner and National Director — Accounting and Audit Standards of Ernst & Young after a long and distinguished career with the firm. In his professional capacity, he has earned standing within the accounting profession and support from the wider business community.

Professor Michael Burgess

Professor Burgess is an Adjunct Professor of Commerce at the University of South Australia and a consultant to KPMG in the areas of health and not‑for‑profit organisations. He is also the Chairman of Country Health South Australia. He was previously a senior partner at KPMG. Over a period of 25 years, he was actively involved in providing audit and financial advisory services to clients in Australia, Canada and the United States of America in the areas of financial services, insurance, retailing, health care and manufacturing. He is also a former member of the Board of Medical Insurance and the Advisory Board of the Australian Broadcasting Corporation.

Mr Roger Cotton

Mr Cotton is the immediate past Chief Executive Officer of the National Institute of Accountants and is the current independent Chairman of Southern Rocklobster Limited, among other senior board positions that he currently holds. He has longstanding experience in consulting and a corporate record in business development, brand stewardship and market positioning. He is well respected in the accounting profession and business industry.

Dr Allen Craswell

Dr Craswell is Emeritus Professor at the University of Sydney. He has significant knowledge of accounting and auditing, having spent several decades in teaching and as a Head of Department in Accounting, both in Australia and abroad. He has held professorial appointments at the Universities of Sydney, Queensland and Melbourne. He is a member of the Education Board of the Institute of Chartered Accountants in Australia and served as a member of the Australian Auditing Standards Board. He has produced a number of books, articles and edited works in auditing and accounting.

Ms Brigid Curran

Ms Curran is an independent financial reporting consultant. She has previously held positions as National Technical Partner for PricewaterhouseCoopers and was a board member of the Australian Accounting Standards Board and a member of the Urgent Issues Group. She has had a long history of involvement in the development and issuance of accounting pronouncements during her employment with the Australian Accounting Research Foundation (AARF), which included a period of secondment as technical director of the International Accounting Standards Committee.

Mr Martin Fensome

Mr Fensome is the Partner in Charge of the Audit and Assurance division of Bentleys Melbourne. He has over 25 years experience, both within Australia and overseas, in providing external and internal assurance services to a broad range of clients in both the private and public sector and has made numerous presentations at various forums on financial reporting. He was previously a senior project manager with the AARF.

Mr Bill Palmer

Mr Palmer is the Director — Asia of the Institute of Chartered Accountants in Australia. He has also held the position of General Manager — Standards & Public Affairs with the Institute. Prior to joining the Institute he was a partner at PricewaterhouseCoopers for 24 years involved in audit engagement. He has extensive experience with business auditing and accounting practices.

Mr Ted Rofe

Mr Rofe was a Director and Chairman of the Australian Shareholders Association. He has practiced as a solicitor in NSW and has lectured in Financial Accounting at the University of NSW. He has also been a member of the Urgent Issues Group, the AARF Legislation Review Board, the Corporations Law Simplification Consultative Group and the Australian Securities and Investments Commission Consumer Advisory Panel.

Organisational structure

The Panel's funding is included in the Treasury budget, and the Panel's staff are employees of Treasury.

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