Governance Review Implementation (AASB and AUASB) Act 2008

The Governance Review Implementation (AASB and AUASB) Act 2008 executes a structural and administrative overhaul of Australia's accounting and auditing standard-setting architecture. It achieves this by amending the Australian Securities and Investments Commission Act 2001 (the ASIC Act) to strip the Australian Accounting Standards Board (AASB) and the Auditing and Assurance Standards Board (AUASB) of their separate legal identities and financial autonomy. Mechanically, the Act transfers all assets, liabilities, and staff of these two boards directly to the Commonwealth. To replace the independent administrative capacity of the boards, the Act establishes two new statutory entities: the Office of the Australian Accounting Standards Board (Office of the AASB) and the Office of the Auditing and Assurance Standards Board (Office of the AUASB). Crucially, as highlighted in the statutory notes to section 226 and section 227AA, neither of these Offices possesses a legal identity separate from the Commonwealth.

This statutory restructuring bifurcates the technical standard-setting process from the day-to-day administration of the boards. While the AASB and AUASB retain their statutory roles as standard-formulators, they are entirely dependent on their respective Offices for technical, administrative, and logistical support. The Act designates the Chair of the AASB and the Chair of the AUASB as the sole managers of these new Offices, reporting directly to the Minister. Under section 235D and section 236DB, the Chairs are vested with unilateral authority to manage budgets, staffing, and operational priorities. This model centralises executive control, as the Chairs are explicitly insulated from any direction or interference by their own board members regarding public service and financial management duties.

Furthermore, the Act recalibrates the power dynamic between these standard-setting bodies and the Financial Reporting Council (FRC). Under the amended section 225, the FRC's role is narrowed. Rather than "periodically reviewing" the boards' processes, the FRC is limited to providing advice or feedback on priorities, business plans, and procedures to the boards, and advice or feedback on budgets and staffing arrangements to the Offices. If the Chair of either board chooses to act inconsistently with the FRC's advice, they must navigate a formal compliance hurdle: they must make a written record of their reasons, deliver those reasons to the Minister, and publish them in their annual report.

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Governance Review Implementation (AASB and AUASB) Act 2008

No. 61, 2008

An Act to amend the Australian Securities and Investments Commission Act 2001, and for related purposes

Contents

1 Short title

2 Commencement

3 Schedule(s)

Schedule 1—Amendments

Australian Securities and Investments Commission Act 2001

Schedule 2—Transitional provisions

Part 1—Definitions

Part 2—Assets, liabilities and legal proceedings

Part 3—Reference to, and things done by or in relation to, the AASB or the AUASB

Part 4—Staff and consultants

Part 5—Other matters

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Governance Review Implementation (AASB and AUASB) Act 2008

No. 61, 2008

An Act to amend the Australian Securities and Investments Commission Act 2001, and for related purposes

[Assented to 30 June 2008]

The Parliament of Australia enacts:

1 Short title

This Act may be cited as the Governance Review Implementation (AASB and AUASB) Act 2008.

2 Commencement

This Act commences on the first 1 July occurring on or after the day on which this Act receives the Royal Assent.

3 Schedule(s)

Each Act that is specified in a Schedule to this Act is amended or repealed as set out in the applicable items in the Schedule concerned, and any other item in a Schedule to this Act has effect according to its terms.

Schedule 1—Amendments

Australian Securities and Investments Commission Act 2001

1 Subsection 5(1)

Insert:

Office of the AASB means the Office of the Australian Accounting Standards Board.

2 Subsection 5(1)

Insert:

Office of the AUASB means the Office of the Auditing and Assurance Standards Board.

3 Before section 225

Insert:

Subdivision A—The Financial Reporting Council

4 Paragraph 225(2)(b)

Repeal the paragraph, substitute:

(b) giving the AASB advice or feedback on the AASB’s:

(i) priorities; and

(ii) business plans; and

(iii) procedures; and

(ba) giving the Office of the AASB advice or feedback on the Office’s:

(i) budgets; and

(ii) staffing arrangements (including level, structure and composition of staffing); and

5 Paragraph 225(2)(d)

Repeal the paragraph.

6 Paragraph 225(2)(j)

Omit “and periodically reviewing”.

7 Paragraph 225(2)(j)

Omit “the AASB”, substitute “those processes”.

8 Paragraph 225(2A)(b)

Repeal the paragraph, substitute:

(b) giving the AUASB advice or feedback on the AUASB’s:

(i) priorities; and

(ii) business plans; and

(iii) procedures; and

(ba) giving the Office of the AUASB advice or feedback on the Office’s:

(i) budgets; and

(ii) staffing arrangements (including level, structure and composition of staffing); and

9 Paragraph 225(2A)(d)

Repeal the paragraph.

10 Paragraph 225(2A)(j)

Omit “and periodically reviewing”.

11 Paragraph 225(2A)(j)

Omit “the AUASB”, substitute “those processes”.

12 Section 226

Repeal the section, substitute:

Subdivision B—The Australian Accounting Standards Board and the Office of the Australian Accounting Standards Board

226 The Office of the Australian Accounting Standards Board

(1) The Office of the Australian Accounting Standards Board is established.

(2) The Office of the AASB consists of:

(a) the Chair of the AASB; and

(b) the other members of the AASB; and

Note: The Office of the AASB does not have a legal identity separate from the Commonwealth.

226A Office of the AASB’s functions and powers

(1) The Office of the AASB has the following functions:

(a) to make such arrangements as are necessary to give effect to the decisions of the AASB;

(b) to provide technical services to the AASB;

(d) to provide information to the AASB;

(e) to advise the AASB about the performance of any of the AASB’s functions;

(f) to make resources and facilities (including meeting facilities, communication facilities and secretariat services) available to the AASB;

(g) such other functions as are conferred on the Office by this Act;

(h) to do anything incidental to, or conducive to, the performance of any of the above functions.

(2) The Office of the AASB has power to:

(a) establish committees, advisory panels and consultative groups; and

(b) receive money contributed towards its or the AASB’s operating costs; and

13 Subsection 227(1) (notes 1 and 2)

Repeal the notes, substitute:

Note 1: The AASB was established by subsection 226(1) of the Australian Securities and Investments Commission Act 1989 and is continued in existence by section 261 of this Act.

Note 2: The standards made under paragraph (b) are given legal effect by the Corporations Act. The standards formulated under paragraph (c) do not have legal effect under the Corporations Act itself but may be applied or adopted by some other authority.

Note 3: See section 224 and sections 228 to 233 for the framework within which the AASB is to formulate and make accounting standards.

14 Subsection 227(3)

Repeal the subsection, substitute:

Power to establish committees etc.

(3) The AASB has power to establish committees, advisory panels and consultative groups.

15 After section 227

Insert:

Subdivision C—The Auditing and Assurance Standards Board and the Office of the Auditing and Assurance Standards Board

227AA The Office of the Auditing and Assurance Standards Board

(1) The Office of the Auditing and Assurance Standards Board is established.

(2) The Office of the AUASB consists of:

(a) the Chair of the AUASB; and

(b) the other members of the AUASB; and

Note: The Office of the AUASB does not have a legal identity separate from the Commonwealth.

227AB Office of the AUASB’s functions and powers

(1) The Office of the AUASB has the following functions:

(a) to make such arrangements as are necessary to give effect to the decisions of the AUASB;

(b) to provide technical services to the AUASB;

(d) to provide information to the AUASB;

(e) to advise the AUASB about the performance of any of the AUASB’s functions;

(f) to make resources and facilities (including meeting facilities, communication facilities and secretariat services) available to the AUASB;

(g) such other functions as are conferred on the Office by this Act;

(h) to do anything incidental to, or conducive to, the performance of any of the above functions.

(2) The Office of the AUASB has power to:

(a) establish committees, advisory panels and consultative groups; and

(b) receive money contributed towards its or the AUASB’s operating costs; and

16 Subsection 227A(1)

Omit “(1)”.

17 Subsections 227A(2) and (3)

Repeal the subsections.

18 Subsection 227B(2)

Repeal the subsection, substitute:

Power to establish committees etc.

(2) The AUASB has power to establish committees, advisory panels and consultative groups.

19 Subsection 231(1) (note)

Omit “227(3)”, substitute “227(4)”.

20 Section 232

Repeal the section, substitute:

232 FRC views

In performing its functions, the AASB must follow the broad strategic direction determined by the FRC under paragraph 225(2)(c).

21 Section 234C

Repeal the section, substitute:

234C FRC views

In performing its functions, the AUASB must follow the broad strategic direction determined by the FRC under paragraph 225(2A)(c).

22 Paragraph 235B(1)(a)

Repeal the paragraph, substitute:

(a) the operations of the FRC and its committees and advisory groups; and

23 Subsections 235B(2) and (2A)

Repeal the subsections, substitute:

(2) The report must include details of any advice or feedback that the FRC gave under paragraph 225(2)(b) or (ba) or (2A)(b) or (ba) during the year that ended on that 30 June.

24 After Subdivision A of Division 3 of Part 12

Insert:

Subdivision AA—The Office of the AASB

235D Duties of the Chair of the AASB

(1) The Chair of the AASB, under the Minister, is responsible for managing the Office of the AASB.

(2) In particular, the Chair of the AASB is responsible for approving:

(a) the AASB’s priorities, business plans and procedures; and

(b) the Office of the AASB’s budgets and staffing arrangements (including level, structure and composition of staffing).

(3) If the Chair of the AASB takes action that is inconsistent with any advice the FRC has given under paragraph 225(2)(b) or (ba), he or she must:

(a) make a written record of his or her reasons for not following the advice; and

(b) give a copy of the advice and of his or her reasons to the Minister; and

235E Staff of the Office of the AASB

Employment of staff

(1) The Chair of the AASB may, on behalf of the Commonwealth, employ such staff under written agreements as the Chair thinks necessary to employ to assist the Office of the AASB in the performance of its functions and the exercise of its powers.

(2) The terms and conditions of staff employed under subsection (1) are as determined in writing by the Chair.

Note: For variation and revocation, see subsection 33(3) of the Acts Interpretation Act 1901.

Office of the AASB Code of Conduct

(3) The Chair of the AASB must determine, in writing, the Office of the AASB Code of Conduct.

Note: For variation and revocation, see subsection 33(3) of the Acts Interpretation Act 1901.

(4) The Office of the AASB Code of Conduct applies to the Chair of the AASB and staff appointed under subsection (1).

(5) An instrument made under subsection (3) is not a legislative instrument.

Engagement of staff under the Public Service Act 1999

(6) Without limiting subsections (1) and (2), staff of the Office of the AASB may be engaged under the Public Service Act 1999.

(7) For the purposes of the Public Service Act 1999:

(a) the Chair of the AASB and the staff of the Office of the AASB referred to in subsection (6) together constitute a Statutory Agency; and

(b) the Chair of the AASB is the Head of that Statutory Agency.

235F Consultants and persons seconded to the Office of the AASB

(1) The Chair of the AASB may, on behalf of the Commonwealth, engage consultants to perform services for the Office of the AASB in connection with the performance of any of its functions.

(2) The terms and conditions of engagement are as determined in writing by the Chair.

Note: For variation and revocation, see subsection 33(3) of the Acts Interpretation Act 1901.

(3) The Office of the AASB may also be assisted:

(a) by employees of Agencies (within the meaning of the Public Service Act 1999); and

(b) by officers and employees of authorities of the Commonwealth; and

whose services are made available to the Office of the AASB in connection with the performance of any of its functions.

235G Office of the AASB to have regard to FRC’s advice etc.

The Office of the AASB must have regard to the advice and feedback about its budgets and staffing arrangements that the FRC gives under paragraph 225(2)(ba).

235H Chair not subject to direction by the AASB on certain matters

To avoid doubt, the Chair of the AASB is not subject to direction by the AASB in relation to the Chair’s performance of functions, or exercise of powers, under the Financial Management and Accountability Act 1997 or the Public Service Act 1999 in relation to the Office of the AASB.

235J Annual report

The Chair of the AASB must, as soon as practicable after the end of each financial year, prepare and give to the Minister, for presentation to the Parliament, a report of the operations of the AASB and the Office of the AASB during the financial year.

25 Subsection 236A(3)

Repeal the subsection.

26 After section 236A

Insert:

236AA AASB to have regard to FRC’s advice etc.

The AASB must have regard to the advice and feedback about its priorities, business plans and procedures that the FRC gives under paragraph 225(2)(b).

27 At the end of Subdivision B of Division 3 of Part 12

Add:

236DA Disclosure of interests

Disclosure to Minister or Chair of AASB

(1) If a member of the AASB has or acquires any direct or indirect pecuniary interest that conflicts or could conflict with the proper performance of the member’s functions, the member must:

(a) if the member is the Chair of the AASB—give written notice of the interest to the Minister; or

(b) if the member is not the Chair of the AASB—give written notice of the interest to the Chair of the AASB.

Disclosure to AASB

(2) A member of the AASB who has a direct or indirect pecuniary interest in a matter being considered or about to be considered by the AASB must disclose the nature of the interest to a meeting of the AASB.

(3) The disclosure under subsection (2) must be made as soon as possible after the relevant facts have come to the member’s knowledge.

(4) The disclosure under subsection (2) must be recorded in the minutes of the meeting of the AASB.

(5) The member:

(a) must not be present during any deliberation by the AASB on the matter; and

(b) must not take part in any decision of the AASB with respect to the matter;

unless the Minister (if the member is the Chair of the AASB) or the Chair of the AASB (if the member is not the Chair of the AASB) otherwise determines.

28 After Subdivision B of Division 3 of Part 12

Insert:

Subdivision BAA—The Office of the AUASB

236DB Duties of the Chair of the AUASB

(1) The Chair of the AUASB, under the Minister, is responsible for managing the Office of the AUASB.

(2) In particular, the Chair of the AUASB is responsible for approving:

(a) the AUASB’s priorities, business plans and procedures; and

(b) the Office of the AUASB’s budgets and staffing arrangements (including level, structure and composition of staffing).

(3) If the Chair of the AUASB takes action that is inconsistent with any advice the FRC has given under paragraph 225(2A)(b) or (ba), he or she must:

(a) make a written record of his or her reasons for not following the advice; and

(b) give a copy of the advice and of his or her reasons to the Minister; and

236DC Staff of the Office of the AUASB

Employment of staff

(1) The Chair of the AUASB may, on behalf of the Commonwealth, employ such staff under written agreements as the Chair thinks necessary to employ to assist the Office of the AUASB in the performance of its functions and the exercise of its powers.

(2) The terms and conditions of staff employed under subsection (1) are as determined in writing by the Chair.

Note: For variation and revocation, see subsection 33(3) of the Acts Interpretation Act 1901.

Office of the AUASB Code of Conduct

(3) The Chair of the AUASB must determine, in writing, the Office of the AUASB Code of Conduct.

Note: For variation and revocation, see subsection 33(3) of the Acts Interpretation Act 1901.

(4) The Office of the AUASB Code of Conduct applies to the Chair of the AUASB and staff appointed under subsection (1).

(5) An instrument made under subsection (3) is not a legislative instrument.

Engagement of staff under the Public Service Act 1999

(6) Without limiting subsections (1) and (2), staff of the Office of the AUASB may be engaged under the Public Service Act 1999.

(7) For the purposes of the Public Service Act 1999:

(a) the Chair of the AUASB and the staff of the Office of the AUASB referred to in subsection (6) together constitute a Statutory Agency; and

(b) the Chair of the AUASB is the Head of that Statutory Agency.

236DD Consultants and persons seconded to the Office of the AUASB

(1) The Chair of the AUASB may, on behalf of the Commonwealth, engage consultants to perform services for the Office of the AUASB in connection with the performance of any of its functions.

(2) The terms and conditions of engagement are as determined in writing by the Chair.

Note: For variation and revocation, see subsection 33(3) of the Acts Interpretation Act 1901.

(3) The Office of the AUASB may also be assisted:

(a) by officers and employees of Agencies (within the meaning of the Public Service Act 1999); and

(b) by officers and employees of authorities of the Commonwealth; and

whose services are made available to the Office of the AUASB in connection with the performance of any of its functions.

236DE Office of the AUASB to have regard to FRC’s advice etc.

The Office of the AUASB must have regard to the advice and feedback about its budgets and staffing arrangements that the FRC gives under paragraph 225(2A)(ba).

236DF Chair not subject to direction by the AUASB on certain matters

To avoid doubt, the Chair of the AUASB is not subject to direction by the AUASB in relation to the Chair’s performance of functions, or exercise of powers, under the Financial Management and Accountability Act 1997 or the Public Service Act 1999 in relation to the Office of the AUASB.

236DG Annual report

The Chair of the AUASB must, as soon as practicable after the end of each financial year, prepare and give to the Minister, for presentation to the Parliament, a report of the operations of the AUASB and the Office of the AUASB during the financial year.

29 Subsection 236E(3)

Repeal the subsection.

30 After section 236E

Insert:

236EA AUASB to have regard to FRC’s advice etc.

The AUASB must have regard to the advice and feedback about its priorities, business plans and procedures that the FRC gives under paragraph 225(2A)(b).

31 At the end of Subdivision BA of Division 3 of Part 12

Add:

236J Disclosure of interests

Disclosure to Minister or Chair of AUASB

(1) If a member of the AUASB has or acquires any direct or indirect pecuniary interest that conflicts or could conflict with the proper performance of the member’s functions, the member must:

(a) if the member is the Chair of the AUASB—give written notice of the interest to the Minister; or

(b) if the member is not the Chair of the AUASB—give written notice of the interest to the Chair of the AUASB.

Disclosure to AUASB

(2) A member of the AUASB who has a direct or indirect pecuniary interest in a matter being considered or about to be considered by the AUASB must disclose the nature of the interest to a meeting of the AUASB.

(3) The disclosure under subsection (2) must be made as soon as possible after the relevant facts have come to the member’s knowledge.

(4) The disclosure under subsection (2) must be recorded in the minutes of the meeting of the AUASB.

(5) The member:

(a) must not be present during any deliberation by the AUASB on the matter; and

(b) must not take part in any decision of the AUASB with respect to the matter;

unless the Minister (if the member is the Chair of the AUASB) or the Chair of the AUASB (if the member is not the Chair of the AUASB) otherwise determines.

32 Subsection 237(1)

Omit “and the AUASB”, substitute “, the Office of the AASB, the AUASB and the Office of the AUASB”.

33 Paragraph 237(2)(b)

Omit “or the AUASB’s”, substitute “, the Office of the AASB’s, the AUASB’s or the Office of the AUASB’s”.

34 Subdivision D of Division 3 of Part 12

Repeal the Subdivision.

35 Paragraphs 246(1)(i) and (j)

Repeal the paragraphs, substitute:

(i) a person who is:

(i) a member of staff of the Office of the AASB engaged under section 235E; or

(ii) a consultant to the Office of the AASB engaged under section 235F; or

(iii) a person assisting the Office of the AASB under subsection 235F(3);

(j) a person who is:

(i) a member of staff of the Office of the AUASB engaged under section 236DC; or

(ii) a consultant to the Office of the AUASB engaged under section 236DD; or

(iii) a person assisting the Office of the AUASB under subsection 236DD(3);

36 At the end of paragraph 246(2)(c)

Add “or by the Office of the AASB”.

37 At the end of paragraph 246(2)(d)

Add “or by the Office of the AUASB”.

Schedule 2—Transitional provisions

Part 1—Definitions

1 Definitions

In this Schedule:

amend includes repeal and remake.

asset means:

(a) any legal or equitable estate or interest in real or personal property, whether actual, contingent or prospective; or

(b) any right, power, privilege or immunity, whether actual, contingent or prospective.

assets official, in relation to an asset other than land, means the person or authority who, under a law of the Commonwealth, a State or a Territory, under a trust instrument or otherwise, has responsibility for keeping a register in relation to assets of the kind concerned.

commencement time means the time when this Schedule commences.

guidance means guidance formulated under paragraph 227B(1)(c) of the Australian Securities and Investments Commission Act 2001.

instrument:

(a) includes:

(i) a contract, deed, undertaking or agreement; and

(ii) a notice, authority, order or instruction; and

(iii) an instrument made under an Act or regulations; and

(iv) regulations; but

(b) does not include an Act.

land means any legal or equitable estate or interest in real property, whether actual, contingent or prospective.

land registration official, in relation to land, means the Registrar of Titles or other proper officer of the State or Territory in which the land is situated.

liability means any liability, duty or obligation, whether actual, contingent or prospective.

new law means the Australian Securities and Investments Commission Act 2001 as in force immediately after the commencement time.

old law means the Australian Securities and Investments Commission Act 2001 as in force immediately before the commencement time.

standard means:

(a) an accounting standard made under section 334 of the Corporations Act 2001; or

(b) an auditing standard made under section 336 of that Act; or

(i) deals with the interpretation of such an accounting standard; and

(ii) such an accounting standard requires to be applied; or

(d) an accounting standard formulated under paragraph 227(1)(c) of the Australian Securities and Investments Commission Act 2001; or

(e) an auditing standard or assurance standard formulated under paragraph 227B(1)(b) of that Act.

Part 2—Assets, liabilities and legal proceedings

2 Vesting of AASB’s assets and liabilities

(1) At the commencement time, the assets of the AASB immediately before the commencement time:

(a) cease to be the assets of the AASB; and

(b) become assets of the Commonwealth without any conveyance, transfer or assignment; and

The Commonwealth becomes the successor in law in relation to these assets.

(2) At the commencement time, the liabilities of the AASB immediately before the commencement time:

(a) cease to be the liabilities of the AASB; and

(b) become liabilities of the Commonwealth without any conveyance, transfer or assignment.

The Commonwealth becomes the successor in law in relation to these liabilities.

3 Vesting of AUASB’s assets and liabilities

(1) At the commencement time, the assets of the AUASB immediately before the commencement time:

(a) cease to be the assets of the AUASB; and

(b) become assets of the Commonwealth without any conveyance, transfer or assignment; and

The Commonwealth becomes the successor in law in relation to these assets.

(2) At the commencement time, the liabilities of the AUASB immediately before the commencement time:

(a) cease to be the liabilities of the AUASB; and

(b) become liabilities of the Commonwealth without any conveyance, transfer or assignment.

The Commonwealth becomes the successor in law in relation to these liabilities.

4 Certificates relating to vesting of land

If:

(a) land vests in the Commonwealth under this Schedule; and

(b) there is lodged with a land registration official a certificate that:

(i) is signed by the Minister; and

(ii) identifies the land, whether by reference to a map or otherwise; and

(iii) states that the land has become vested in the Commonwealth under this Schedule;

the land registration official may:

(c) register the matter in a way that is the same as, or similar to, the way in which dealings in land of that kind are registered; and

(d) deal with, and give effect to, the certificate.

Note: Certificates under paragraph (b) are presumed to be authentic: see item 22 of this Schedule.

5 Certificates relating to vesting of assets other than land

If:

(a) any asset other than land vests in the Commonwealth under this Schedule; and

(b) there is lodged with an assets official a certificate that:

(i) is signed by the Minister; and

(ii) identifies the asset; and

(iii) states that the asset has become vested in the Commonwealth under this Schedule;

the assets official may:

(c) deal with, and give effect to, the certificate as if it were a proper and appropriate instrument for transactions in relation to assets of that kind; and

(d) make such entries in a register as are necessary having regard to the effect of this Part.

Note: Certificates under paragraph (b) are presumed to be authentic: see item 22 of this Schedule.

6 Substitution of Commonwealth as a party to pending proceedings

If any proceedings to which the AASB or AUASB was a party were pending in any court or tribunal immediately before the commencement time, the Commonwealth is substituted for the AASB or AUASB, from the commencement time, as a party to the proceedings.

7 Transfer of custody of AASB and AUASB records

(1) Any records or documents that, immediately before the commencement time, were in the custody of the AASB are to be transferred into the custody of the Office of the AASB at or after the commencement time.

(2) Any records or documents that, immediately before the commencement time, were in the custody of the AUASB are to be transferred into the custody of the Office of the AUASB at or after the commencement time.

Part 3—Reference to, and things done by or in relation to, the AASB or the AUASB

8 References in instruments

References to AASB or AUASB

(1) If:

(a) an instrument (other than a standard or guidance) is in force immediately before the commencement time; and

(b) the instrument contains a reference to the AASB;

the instrument has effect from the commencement time as if the reference were a reference to the Office of the AASB.

(2) If:

(a) an instrument (other than a standard or guidance) is in force immediately before the commencement time; and

(b) the instrument contains a reference to the AUASB;

the instrument has effect from the commencement time as if the reference were a reference to the Office of the AUASB.

(3) However, if:

(a) an instrument (other than a standard or guidance) is in force immediately before the commencement time; and

(b) the instrument relates to assets or liabilities covered by item 2 or 3 of this Schedule; and

the reference is to be read as a reference to the Commonwealth as necessary to give effect to item 2 or 3 of this Schedule, as the case requires.

Minister and regulations may provide otherwise

(4) The Minister may, by writing, determine that subitem (1), (2) or (3):

(a) does not apply in relation to a specified reference; or

(b) applies as if:

(i) in the case of subitem (1)—the reference in that subitem to the Office of the AASB were a reference to the Commonwealth; or

(ii) in the case of subitem (2)—the reference in that subitem to the Office of the AUASB were a reference to the Commonwealth; or

(iii) in the case of subitem (3)—the reference in that subitem to the Commonwealth were a reference to the Office of the AASB or the Office of the AUASB (as the case requires).

A determination under this subitem has effect accordingly.

(5) The regulations may provide that an instrument (other than a standard or guidance) containing a reference specified in a determination under paragraph (4)(a) has effect from the commencement time as if:

(a) in the case of an instrument covered by subitem (1)—the reference were a reference to a specified person or body, other than the AASB or the Office of the AASB; or

(b) in the case of an instrument covered by subitem (2)—the reference were a reference to a specified person or body, other than the AUASB or the Office of the AUASB; or

(c) in the case of an instrument covered by subitem (3)—the reference were a reference to a specified person or body, other than the Commonwealth or:

(i) the AASB or the Office of the AASB; or

(ii) the AUASB or the Office of the AUASB;

as the case requires.

Determinations are not legislative instruments

(6) A determination under subitem (4) is not a legislative instrument.

9 Operation of laws

Things done by AASB or AUASB

(1) If, before the commencement time, a thing was done by, or in relation to, the AASB, then, for the purposes of the operation of any law of the Commonwealth after the commencement time, the thing is taken to have been done by, or in relation to, the Commonwealth.

(2) If, before the commencement time, a thing was done by, or in relation to, the AUASB, then, for the purposes of the operation of any law of the Commonwealth after the commencement time, the thing is taken to have been done by, or in relation to, the Commonwealth.

(3) For the purposes of subitems (1) and (2), a thing done before the commencement time under a provision that is amended by this Act has effect from that time as if it were done under that provision as amended. However, this is not taken to change the time at which the thing was actually done.

Minister and regulations may provide otherwise

(4) The Minister may, by writing, determine that subitem (1) or (2):

(a) does not apply in relation to a specified thing done by, or in relation to, the AASB or the AUASB (as the case requires); or

(b) applies as if the reference in that subitem to the Commonwealth were a reference to the Office of the AASB or the Office of the AUASB (as the case requires).

A determination under this subitem has effect accordingly.

(5) The regulations may provide for a thing specified in a determination under paragraph (4)(a) to be taken to have been done by, or in relation to, a specified person or body other than the Commonwealth or the Office of the AASB or Office of the AUASB (as the case requires).

Meaning of doing

(6) For the purposes of this item, doing a thing includes making an instrument, but does not include making a standard or formulating guidance.

Determinations are not legislative instruments

(7) A determination made under subitem (4) is not a legislative instrument.

10 Reporting requirements of the AASB etc.

Future reporting requirements

(1) If:

(a) immediately before the commencement time, a law required the AASB, the Chair of the AASB or the members of the AASB to provide a report (whether financial statements or otherwise) for a period; and

(b) the period ends after the commencement time;

the Chair of the AASB must provide the report, as required, for so much of the period as occurs before the commencement time.

(2) If:

(a) under subitem (1), the Chair of the AASB is required to provide a report for a part of a period; and

(b) the Chair of the AASB is also required to provide a similar report for the remainder of the period;

the Chair of the AASB may meet the requirements in a single report for the period.

Outstanding reporting requirements

(3) If:

(a) a law required the AASB, the Chair of the AASB or the members of the AASB to provide a report (whether financial statements or otherwise) for a period that ended before the commencement time; and

(b) the report has not been provided by the commencement time;

the Chair of the AASB must provide the report as required.

Application of law to Chair of the AASB

(4) To avoid doubt, if, under this item, the Chair of the AASB is required to provide a report under a law, the law applies to the Chair of the AASB in respect of the report in the same way as the law would have applied to the AASB, the Chair of the AASB or the members of the AASB in respect of the report.

11 Reporting requirements of the AUASB etc.

Future reporting requirements

(1) If:

(a) immediately before the commencement time, a law required the AUASB, the Chair of the AUASB or the members of the AUASB to provide a report (whether financial statements or otherwise) for a period; and

(b) the period ends after the commencement time;

the Chair of the AUASB must provide the report, as required, for so much of the period as occurs before the commencement time.

(2) If:

(a) under subitem (1), the Chair of the AUASB is required to provide a report for a part of a period; and

(b) the Chair of the AUASB is also required to provide a similar report for the remainder of the period;

the Chair of the AUASB may meet the requirements in a single report for the period.

Outstanding reporting requirements

(3) If:

(a) a law required the AUASB, the Chair of the AUASB or the members of the AUASB to provide a report (whether financial statements or otherwise) for a period that ended before the commencement time; and

(b) the report has not been provided by the commencement time;

the Chair of the AUASB must provide the report as required.

Application of law to Chair of the AUASB

(4) To avoid doubt, if, under this item, the Chair of the AUASB is required to provide a report under a law, the law applies to the Chair of the AUASB in respect of the report in the same way as the law would have applied to the AUASB, the Chair of the AUASB or the members of the AUASB in respect of the report.

12 Reporting requirements of the FRC etc.

Future reporting requirements

(1) If:

(a) immediately before the commencement time, a law required the FRC, the Chair of the FRC or the members of the FRC to provide a report (whether financial statements or otherwise) relating to the AASB or the AUASB for a period; and

(b) the period ends after the commencement time;

the FRC must provide the report, as required, for so much of the period as occurs before the commencement time.

(2) If:

(a) under subitem (1), the FRC is required to provide a report for a part of a period; and

(b) the FRC is also required to provide a similar report for the remainder of the period;

the FRC may meet the requirements in a single report for the period.

Outstanding reporting requirements

(3) If:

(a) a law required the FRC, the Chair of the FRC or the members of the FRC to provide a report (whether financial statements or otherwise) relating to the AASB or the AUASB for a period that ended before the commencement time; and

(b) the report has not been provided by the commencement time;

the FRC must provide the report as required.

Application of law to Chair of the FRC

(4) To avoid doubt, if, under this item, the FRC is required to provide a report under a law, the law applies to the FRC in respect of the report in the same way as the law would have applied to the FRC, the Chair of the FRC or the members of the FRC in respect of the report.

13 Continuing obligation to keep records

(1) Section 20 of the Commonwealth Authorities and Companies Act 1997 (as in force from time to time) continues to apply after the commencement time in relation to the accounting records kept by the AASB under that section before that time as if the Office of the AASB were subject to that Act in place of the AASB.

(2) Section 20 of the Commonwealth Authorities and Companies Act 1997 (as in force from time to time) continues to apply after the commencement time in relation to the accounting records kept by the AUASB under that section before that time as if the Office of the AUASB were subject to that Act in place of the AUASB.

Part 4—Staff and consultants

14 Staff of the AASB

(1) A person who was a member of the staff of the AASB immediately before the commencement time is taken, at the commencement time, to have been engaged by the Chair of the AASB as a member of the staff of the Office of the AASB.

(2) The person is taken:

(a) to have been engaged on the same terms and conditions as applied to the person immediately before the commencement time; and

(b) to have an entitlement to benefits, in connection with that engagement by the Chair of the AASB, that is equivalent to the person’s entitlement, as a member of the staff of the AASB, immediately before the commencement time.

(3) The service of the person as a member of the staff of the Office of the AASB is taken, for all purposes, to have been continuous with the service, immediately before the commencement time, of the employee as a member of the staff of the AASB.

(4) The person is not entitled to receive any payment or other benefit merely because he or she stopped being a member of the staff of the AASB as a result of this Act.

(5) This item does not prevent the terms and conditions referred to in paragraph (2)(a) being varied after the commencement time.

15 Staff of the AUASB

(1) A person who was a member of the staff of the AUASB immediately before the commencement time is taken, at the commencement time, to have been engaged by the Chair of the AUASB as a member of the staff of the Office of the AUASB.

(2) The person is taken:

(a) to have been engaged on the same terms and conditions as applied to the person immediately before the commencement time; and

(b) to have an entitlement to benefits, in connection with that engagement by the Chair of the AUASB, that is equivalent to the person’s entitlement, as a member of the staff of the AUASB, immediately before the commencement time.

(3) The service of the person as a member of the staff of the Office of the AUASB is taken, for all purposes, to have been continuous with the service, immediately before the commencement time, of the employee as a member of the staff of the AUASB.

(4) The person is not entitled to receive any payment or other benefit merely because he or she stopped being a member of the staff of the AUASB as a result of this Act.

(5) This item does not prevent the terms and conditions referred to in paragraph (2)(a) being varied after the commencement time.

16 Consultants

(1) A person in respect of whom an engagement as a consultant was in force under paragraph 227(3)(a) or 227B(2)(a) of the old law immediately before the commencement time is taken, at the commencement time, to have been engaged as a consultant under subsection 235F(1) or 236DD(1) (as the case requires) of the new law.

(2) The person is taken to have been engaged on the same terms and conditions as applied to the person immediately before the commencement time.

(3) This item does not prevent those terms and conditions being varied after the commencement time.

Part 5—Other matters

17 Accounting standards and auditing standards etc. unaffected

To avoid doubt, this Act does not affect:

(a) the validity of accounting standards made or formulated by the AASB before the commencement time; or

(b) the validity of auditing standards or guidance made or formulated by the AUASB before the commencement time.

18 Membership of AASB and AUASB unaffected

To avoid doubt, if, immediately before the commencement time, a person’s appointment as a member of the AASB or AUASB is in force, this Act does not affect the continuation of the person’s appointment after the commencement time.

19 Liability for damages

If:

(a) section 246 of the old law applied to a person in relation to an act done or omitted before the commencement time; and

(b) section 246 of the new law would not (but for this item) apply to the person;

section 246 of the new law is taken to apply to the person in relation to the act or omission.

20 Exemption from stamp duty and other State or Territory taxes

No stamp duty or other tax is payable under a law of a State or Territory in respect of, or in respect of anything connected with:

(a) the transfer of an asset or liability under this Schedule; or

(b) the operation of this Schedule in any other respect.

21 Constitutional safety net—acquisition of property

(1) If the operation of this Schedule would result in an acquisition of property from a person otherwise than on just terms, the Commonwealth is liable to pay a reasonable amount of compensation to the person.

(2) If the Commonwealth and the person do not agree on the amount of the compensation, the person may institute proceedings in a court of competent jurisdiction for the recovery from the Commonwealth of such reasonable amount of compensation as the court determines.

(3) In this item:

acquisition of property has the same meaning as in paragraph 51(xxxi) of the Constitution.

just terms has the same meaning as in paragraph 51(xxxi) of the Constitution.

22 Certificates taken to be authentic

A document that appears to be a certificate made or issued under a particular provision of this Schedule:

(a) is taken to be such a certificate; and

(b) is taken to have been properly given;

unless the contrary is established.

23 Delegation by Minister

(1) The Minister may, by writing, delegate all or any of his or her powers and functions under this Schedule relating to the AASB or the Office of the AASB to:

(a) the Chair of the AASB; or

(b) the Secretary of the Department; or

(2) The Minister may, by writing, delegate all or any of his or her powers and functions under this Schedule relating to the AUASB or the Office of the AUASB to:

(a) the Chair of the AUASB; or

(b) the Secretary of the Department; or

(3) In exercising powers or performing functions under a delegation under this item, the delegate must comply with any directions of the Minister.

24 Regulations

(1) The Governor‑General may make regulations prescribing matters:

(a) required or permitted by this Schedule to be prescribed; or

(b) necessary or convenient to be prescribed for carrying out or giving effect to this Schedule.

(2) The Governor‑General may make regulations prescribing matters of a transitional nature (including prescribing any saving or application provisions) relating to the amendments or repeals made by Schedule 1 to this Act.

[Minister’s second reading speech made in—

House of Representatives on 18 June 2008

Senate on 26 June 2008]

(133/08)

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Governance Review Implementation (AASB and AUASB) Act 2008

No. 61, 2008

An Act to amend the Australian Securities and Investments Commission Act 2001, and for related purposes

Contents

1 Short title

2 Commencement

3 Schedule(s)

Schedule 1—Amendments

Australian Securities and Investments Commission Act 2001

Schedule 2—Transitional provisions

Part 1—Definitions

Part 2—Assets, liabilities and legal proceedings

Part 3—Reference to, and things done by or in relation to, the AASB or the AUASB

Part 4—Staff and consultants

Part 5—Other matters

Governance Review Implementation (AASB and AUASB) Act 2008

No. 61, 2008

An Act to amend the Australian Securities and Investments Commission Act 2001, and for related purposes

[Assented to 30 June 2008]

The Parliament of Australia enacts:

1 Short title

This Act may be cited as the Governance Review Implementation (AASB and AUASB) Act 2008.

2 Commencement

This Act commences on the first 1 July occurring on or after the day on which this Act receives the Royal Assent.

3 Schedule(s)

Schedule 1—Amendments

Australian Securities and Investments Commission Act 2001

1 Subsection 5(1)

Insert:

Office of the AASB means the Office of the Australian Accounting Standards Board.

To understand the legal operation of the Governance Review Implementation (AASB and AUASB) Act 2008, one must master several distinct statutory concepts introduced or modified by the text.

The "Office of the AASB" and "Office of the AUASB" are established under section 226 and section 227AA. These entities are not corporate bodies; they are administrative aggregations consisting of the Chair of the board, the other members of the board, and the staff of the Office. Because these Offices do not have a legal identity separate from the Commonwealth, any contract executed, asset held, or liability incurred by the Office is legally an act, asset, or liability of the Commonwealth itself.

The concept of a "Statutory Agency" under the Public Service Act 1999 is applied to both Offices by section 235E(7) and section 236DC(7). The Act establishes that the Chair of each board and the staff engaged under the Public Service Act 1999 together constitute a Statutory Agency, and the Chair is designated as the Head of that Statutory Agency. This confers upon the Chairs the administrative powers of a Secretary of a Commonwealth Department in relation to staffing and employment.

A distinction is drawn between "FRC Views" and "FRC Advice". Under section 232 and section 234C, the AASB and AUASB "must follow" the broad strategic direction determined by the FRC. This is a mandatory command. In contrast, under section 235G and section 236DE, the Offices must only "have regard to" the advice and feedback given by the FRC concerning budgets and staffing. This lighter obligation of having regard to advice is paired with the transparency mechanism in section 235D(3) and section 236DB(3), which permits the Chairs to deviate from the FRC's feedback provided they document and report their reasons to the Minister and Parliament.

The term "Pecuniary Interest" is defined operationally through the disclosure regimes in section 236DA and section 231J. It encompasses "any direct or indirect pecuniary interest that conflicts or could conflict with the proper performance" of a board member's functions. The concept is binary and strict; it does not contain a materiality threshold. Once an interest is identified, it triggers an immediate obligation to disclose and results in the mandatory physical exclusion of the member from deliberations and decision-making on the relevant matter.

Under the transitional provisions in Schedule 2, the concepts of "Asset" and "Liability" are defined broadly. An asset includes any legal or equitable estate or interest in real or personal property, whether actual, contingent, or prospective, as well as any right, power, privilege, or immunity. A liability covers any liability, duty, or obligation, whether actual, contingent, or prospective. This ensures an absolute, seamless transfer of all legal positions from the old board structures to the Commonwealth.

The mechanical operations of the Governance Review Implementation (AASB and AUASB) Act 2008 directly impact several distinct legal and professional cohorts, shifting their rights, exposures, and operational duties.

First, the Chairs of the AASB and AUASB are heavily affected. They are elevated from leaders of collegiate standard-setting boards to executive managers of Commonwealth Statutory Agencies. Under section 235D and section 236DB, they carry the sole legal responsibility for managing the Offices under the Minister. This includes approving budgets, determining staffing arrangements, and establishing the formal written Code of Conduct for their respective Offices. They must manage these responsibilities without the input or vote of their fellow board members, and they bear the personal administrative burden of documenting and reporting any deviations from FRC advice.

Second, the Board Members of the AASB and AUASB find their roles significantly narrowed. While they continue to formulate accounting and auditing standards, they no longer have any oversight or voting rights regarding the budgets, staffing, technical services, or administrative support of their own organisations. Furthermore, they are subject to a highly prescriptive pecuniary interest disclosure regime under section 236DA and section 236J, which strips them of their voting and participation rights during any meeting where a potential conflict arises.

Third, the Staff and Consultants of the AASB and AUASB are affected by the transitional provisions in Schedule 2. Employees of the old boards are automatically transferred to the employment of the Chairs on behalf of the Commonwealth. While the Act guarantees continuous service and equivalent terms and conditions under Schedule 2 Items 14 and 15, the staff are brought into a public sector employment framework. They are subject to a newly determined Code of Conduct and can be engaged directly under the Public Service Act 1999.

Fourth, the Financial Reporting Council (FRC) faces a recalibration of its authority. The FRC can no longer audit or periodically review the internal processes of the boards. Instead, its influence is channeled through formal "advice or feedback" on priorities, business plans, procedures, budgets, and staffing. This shifts the FRC's role from a retro-active auditor to a pro-active, strategic advisor.

Fifth, third-party contractors, suppliers, and landlords who previously entered into agreements with the AASB or AUASB are affected. By virtue of Schedule 2 Item 8, any existing contract with the boards is legally converted into a contract with the Commonwealth, held by the respective Office.

Finally, state and territory land and asset registration officials are affected by the transitional mechanisms in Schedule 2 Items 4 and 5. They must register the transfer of real property and other assets to the Commonwealth upon receiving a signed certificate from the Minister.

The Governance Review Implementation (AASB and AUASB) Act 2008 establishes a rigorous matrix of statutory duties and corresponding legal rights, structured to balance executive accountability with administrative continuity.

The primary duty of the Chairs, set out in section 235D and section 236DB, is to manage the Offices under the Minister. This includes the specific duty to approve the boards' priorities, business plans, and procedures, as well as the Offices' budgets and staffing arrangements. If a Chair exercises this authority in a manner inconsistent with FRC advice, they are bound by a strict reporting duty: they must make a written record of their reasons, deliver a copy of the advice and their reasons to the Minister, and include those details in their annual report to Parliament.

Under section 235E(3) and section 236DC(3), the Chairs have a mandatory duty to determine, in writing, a Code of Conduct that applies to themselves and all staff employed under written agreements. Additionally, the Chairs must prepare and give to the Minister an annual report on the operations of the board and the Office as soon as practicable after the end of each financial year (section 235J and section 236DG).

Board members are bound by strict disclosure duties under section 236DA and section 236J. If a member has or acquires a direct or indirect pecuniary interest that conflicts or could conflict with their functions, they must give written notice of the interest. If the member is the Chair, they must notify the Minister; other members must notify their respective Chair. Furthermore, members must disclose any pecuniary interest in a matter being considered by the board at the relevant meeting. This disclosure must be recorded in the minutes. Crucially, the affected member is under a strict statutory duty not to be present during deliberations and not to participate in decisions regarding the matter, unless the Minister or the Chair determines otherwise.

The primary rights created by the Act belong to the transferred staff and consultants under Schedule 2. Transferred employees have a statutory right to be engaged on the same terms and conditions that applied immediately before the commencement time. They have a right to equivalent benefit entitlements, and their service is deemed to be continuous for all purposes. Under Schedule 2 Items 14(4) and 15(4), they have a right to be protected from receiving redundancy or termination benefits merely because their employment was transferred to the Commonwealth.

Lastly, property owners affected by the transitional transfer of assets are protected by a constitutional safety net. Under Schedule 2 Item 21, if the operation of the transition schedule results in an acquisition of property from a person otherwise than on "just terms" within the meaning of paragraph 51(xxxi) of the Constitution, the Commonwealth has a duty to pay a reasonable amount of compensation. Affected parties have a statutory right to institute proceedings in a court of competent jurisdiction to recover this compensation if an agreement cannot be reached.

Unlike standard regulatory acts, the Governance Review Implementation (AASB and AUASB) Act 2008 does not contain a schedule of criminal offences, civil penalty provisions, or fines. Instead, its enforcement mechanisms are structural, administrative, and self-executing, relying on employment law, statutory exclusions, and executive reporting.

For board members, compliance with the conflict of interest provisions in section 236DA and section 236J is enforced via automatic statutory exclusion. If a member discloses a pecuniary interest, or if such an interest exists, the statute itself commands that the member "must not be present during any deliberation" and "must not take part in any decision" regarding the matter. This is a self-executing prohibition. A failure to comply with this statutory bar would invalidate the affected decision of the board, creating a powerful incentive for both the individual member and the collective board to strictly enforce the recusal. Because board members are appointed by the Minister, any persistent failure to disclose conflicts would constitute grounds for administrative removal, though the specific mechanics of removal remain governed by the broader ASIC Act 2001.

For the Chairs and staff, compliance is enforced through public service administrative structures and employment law. The Code of Conduct determined by the Chairs under section 235E(3) and section 236DC(3) is legally binding on the Chairs and their staff. A breach of this Code would be handled through standard public service disciplinary procedures, which can culminate in termination of employment.

For the transfer of assets and liabilities, enforcement is secured through the absolute legal successorship of the Commonwealth. Under Schedule 2 Items 2 and 3, the assets and liabilities of the AASB and AUASB cease to be theirs and become the Commonwealth's by force of law, "without any conveyance, transfer or assignment." To enforce this vesting against third parties or registrars, the Minister may sign certificates under Schedule 2 Items 4 and 5. These certificates are given immense evidentiary weight: under Item 22, they are legally presumed to be authentic and properly given unless the contrary is established, effectively placing the burden of proof on any party seeking to challenge the Commonwealth's title.

Finally, civil liability enforcement against the personnel of the Offices is restricted. The Act amends section 246 of the ASIC Act to extend statutory immunity from damages. Staff, consultants, and seconded persons of the Office of the AASB and the Office of the AUASB are protected from liability for acts done or omitted in good faith in the performance of their statutory functions. This shifts the target of any external civil litigation entirely onto the Commonwealth.

The Governance Review Implementation (AASB and AUASB) Act 2008 does not operate in isolation; it is designed to integrate the accounting and auditing standard-setting bodies into the broader web of Commonwealth administrative, employment, and financial legislation.

First, its primary interaction is with the Australian Securities and Investments Commission Act 2001, which it directly amends. The Act reshapes Part 12 of the ASIC Act, inserting Subdivisions AA and BAA to govern the newly created Offices, and modifying the advisory powers of the FRC under section 225.

Second, the Act establishes a direct link to the Public Service Act 1999. Under section 235E(6) and section 236DC(6), staff of the Offices may be engaged under the Public Service Act. The Offices are designated as Statutory Agencies, and the Chairs are designated as Agency Heads. This subjects the management of the staff to the broader public service standards, values, and commissioner's directions, while preserving the alternative pathway for the Chairs to employ staff under independent written agreements on behalf of the Commonwealth.

Third, the Act interacts with the Financial Management and Accountability Act 1997 (the FMA Act). The Chairs are responsible for managing the Offices' budgets and finances under the FMA Act. To prevent the standard-setting boards from interfering in public financial management, section 235H and section 236DF explicitly state that the Chairs are not subject to direction by their respective boards in relation to their performance of functions or exercise of powers under the FMA Act. This establishes a clear boundary between standard-setting and public financial management.

Fourth, the Act maintains an interface with the Corporations Act 2001. Although the standard-setting powers are structured under the ASIC Act, Note 2 to section 227(1) confirms that accounting standards made by the AASB are given legal effect by the Corporations Act. Similarly, auditing standards formulated by the AUASB receive their domestic legal force through the operation of the Corporations Act. The restructuring of the administrative Offices does not disrupt this legal chain of authority.

Fifth, the transitional provisions preserve obligations under the Commonwealth Authorities and Companies Act 1997. Under Schedule 2 Item 13, the record-keeping obligations under section 20 of that Act continue to apply to the pre-commencement accounting records of the AASB and AUASB, treating the Offices as if they were subject to that Act in place of the old boards.

Sixth, the Act references the Acts Interpretation Act 1901. Notes to sections 235E, 235F, 236DC, and 236DD cite subsection 33(3) of the Acts Interpretation Act to govern the variation and revocation of employment terms, consultant engagements, and Codes of Conduct.

Finally, the Act interacts directly with the Australian Constitution. The transitional compensation mechanism in Schedule 2 Item 21 is explicitly designed to comply with paragraph 51(xxxi) of the Constitution, ensuring that the statutory transfer of assets does not constitute an unconstitutional acquisition of property without just terms.

The Governance Review Implementation (AASB and AUASB) Act 2008 was enacted as a single, targeted piece of amending legislation (No. 61 of 2008). It was introduced into the House of Representatives on 18 June 2008 and passed through the Senate on 26 June 2008, receiving Royal Assent on 30 June 2008.

Under section 2, the Act commenced on 1 July 2008, which was the first 1 July occurring on or after the day of Royal Assent. The Act contains two primary Schedules: Schedule 1, which contains the direct textual amendments to the ASIC Act 2001, and Schedule 2, which contains the free-standing transitional provisions that did not amend the text of other Acts but carried independent statutory force.

The primary historical driver of this Act, as identified in its title, was the implementation of a broader "Governance Review" (commonly referred to in Australian public administration as the Uhrig Review). This review sought to standardise the governance of Commonwealth statutory authorities, particularly by assessing whether agencies should be structured as executive agencies, statutory agencies, or CAC Act companies, and by aligning their financial management with the Commonwealth's central budget frameworks.

The amendments made by Schedule 1 of this Act have been incorporated into subsequent consolidations of the Australian Securities and Investments Commission Act 2001. The transitional provisions in Schedule 2 have not been amended since their enactment, having largely spent their administrative force once the transfer of staff, assets, liabilities, and records was completed following the 1 July 2008 commencement.

Because the Governance Review Implementation (AASB and AUASB) Act 2008 is primarily an administrative and machinery-of-government statute, it has not generated a large body of published case law. The source text itself does not name any judicial or tribunal decisions. However, the Act establishes clear statutory rules to govern any litigation that was active at the time of commencement or that arose from the transfer of assets.

Under Schedule 2 Item 6, the Act addresses pending legal proceedings. If any court or tribunal proceedings to which the AASB or AUASB was a party were active immediately before the commencement time, the Commonwealth was automatically substituted as a party in place of the boards from 1 July 2008. This prevented any disruption to ongoing litigation, ensuring that the abolition of the boards' separate legal identities did not cause pending actions to abate. Any liability or right to recover in those proceedings was instantly transferred to the Commonwealth.

Additionally, Schedule 2 Item 21 outlines the procedural pathway for any constitutional litigation arising from the acquisition of property. By establishing that the Commonwealth is liable to pay reasonable compensation if the transition operated on unjust terms, the Act provides a clear cause of action. It explicitly authorises affected individuals to "institute proceedings in a court of competent jurisdiction" to recover such compensation if negotiations with the Commonwealth fail. This provision was included to insulate the Act from constitutional challenges under paragraph 51(xxxi) of the Constitution.

Finally, the amendment to the civil immunity provisions in section 246 of the ASIC Act (Schedule 1 Items 35-37) protects the staff and consultants of the newly established Offices from personal liability. Any litigation seeking damages for acts or omissions done in good faith during the performance of standard-setting or administrative support functions must be directed against the Commonwealth, rather than the individual officers. Schedule 2 Item 19 ensures that this protection applies retrospectively to acts or omissions that occurred before the commencement of the Act.

For legal practitioners, accountants, and public sector administrators, several complex provisions and statutory risks in the Governance Review Implementation (AASB and AUASB) Act 2008 merit close attention.

First, there is the "Illusion of Board Autonomy". While the AASB and AUASB are presented to the public and the markets as independent standard-setting bodies, they have zero control over the personnel, technical services, and budgets that allow them to function. If a board clashes with its Chair over administrative support, the board has no legal mechanism to override the Chair. Under section 235H and section 236DF, the Chairs are explicitly immune from board direction regarding their powers under the Financial Management and Accountability Act 1997 or the Public Service Act 1999. The standard-setting members are effectively administrative tenants in an office managed entirely by the Chair.

Second, the "FRC Advice" trap is a significant administrative hurdle. Nominally, the Offices are only required to "have regard to" the FRC's advice on budgets and staffing (section 235G and section 236DE), suggesting they have the discretion to reject it. However, if a Chair decides to act inconsistently with this advice, they must execute a highly burdensome compliance protocol under section 235D(3) or section 236DB(3). They must create a written record of their reasons, provide a copy to the Minister, and publish the advice and their reasons in their annual report. This reporting requirement acts as a powerful practical deterrent against ignoring FRC recommendations, effectively giving the FRC back-door control over budgets and staffing.

Third, the conflict of interest disclosure provisions in section 236DA and section 236J contain no materiality threshold. The statute applies to "any direct or indirect pecuniary interest that conflicts or could conflict" with the proper performance of a member's functions. An indirect, minor shareholding in a company affected by a draft accounting standard could technically trigger the mandatory disclosure and physical exclusion provisions. Meeting administrators must be highly vigilant, as allowing a conflicted member to remain present during deliberations or to vote could expose the board's final standard-setting decisions to administrative law challenges.

Fourth, under Schedule 2 Item 8(4), the Minister is granted broad power to determine that the standard transitional reference provisions do not apply to specific instruments or references. Crucially, under Item 8(6), these ministerial determinations are explicitly declared not to be legislative instruments. This exempts them from parliamentary tabling and disallowance procedures, allowing the executive to make targeted, non-reviewable adjustments to transition arrangements.

Fifth, third parties entering into contracts with the Offices must remain aware that they are contracting directly with the Commonwealth. This alters standard procurement rules, contract variation procedures, and litigation pathways, as the Offices have no separate corporate existence and cannot sue or be sued in their own name.

Compliance with the Governance Review Implementation (AASB and AUASB) Act 2008 requires different procedures depending on whether one is a board member, an executive Chair, a public sector administrator, or a state land official.

For Board Members of the AASB and AUASB:

Implement a continuous monitoring system for personal financial portfolios. This must capture all direct and indirect pecuniary interests, including shares, trusts, and commercial partnerships held by the member or close associates.
Before every board meeting, cross-reference this portfolio against the scheduled agenda items and draft standards under consideration.
If an interest conflicts or could conflict with an agenda item, submit a formal written notice of the interest to the Chair (or to the Minister, if the affected member is the Chair) as soon as the facts are known (section 236DA(1) and section 236J(1)).
At the commencement of the meeting, verbally declare the nature of the interest (section 236DA(2) and section 236J(2)).
Ensure that the secretariat records the exact nature of the disclosure in the minutes of the meeting (section 236DA(4) and section 236J(4)).
Physically exit the meeting room prior to any deliberation on the matter and do not return until a decision has been finalised, unless a formal determination permitting participation has been made by the Minister or Chair (section 236DA(5) and section 236J(5)).

For the Chairs of the AASB and AUASB:

Establish separate operational protocols for managing the Offices under the Minister, independent of board meetings.
Draft and execute a formal, written Code of Conduct for the staff of the Office, ensuring it is distributed to all employees engaged under written agreements (section 235E(3) and section 236DC(3)).
Maintain a formal log of all strategic advice and feedback received from the FRC regarding budgets, staffing, priorities, and business plans.
If an operational decision is made that departs from FRC advice:
- Immediately draft a written record detailing the precise reasons for the inconsistent action.
- Transmit a copy of the FRC advice and the written reasons to the Minister.
- Flag this record for mandatory inclusion in the upcoming annual report (section 235D(3) and section 236DB(3)).
Ensure the annual report of the operations of the board and the Office is prepared and delivered to the Minister as soon as practicable after 30 June each year (section 235J and section 236DG).

For State and Territory Land and Asset Registrars:

Upon receiving a certificate signed by the federal Minister identifying land or other assets that have vested in the Commonwealth under Schedule 2, accept the certificate as an authentic instrument without requiring further transfer deeds or stamp duty payments (Schedule 2 Items 4, 5, and 20).
Register the Commonwealth as the legal owner of the asset, noting that the asset is held by the Office of the AASB or the Office of the AUASB for and on behalf of the Commonwealth.

Governance Review Implementation (AASB and AUASB) Act 2008

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