Cutting Red Tape and Improving Australia's Corporate Reporting Framework
04 December 2009
The Minister for Financial Services, Superannuation and Corporate Law today released draft reforms to cut red-tape and improve Australia's corporate reporting framework.
The key measures to reduce red-tape include:
significantly reducing the regulatory burden on companies limited by guarantee (which typically have a not-for-profit purpose), by introducing a three tiered differential reporting framework;
streamlining parent-entity reporting;
providing greater flexibility for companies to pay dividends, by replacing the profits test with a solvency-type test; and
allowing companies to more easily change their year-end date to minimise the burden on companies and their auditors during peak reporting periods.
The reforms will also implement refinements to the regulatory framework, including:
improving disclosure of non-financial information in the directors' report;
protecting solicitors' representation letters from disclosure to enable auditors to properly verify a company's contingent liabilities;
refining the statement of compliance with International Financial Reporting Standards contained in the directors' declaration; and
clarifying the circumstances in which a company can cancel its share capital.
The reforms are being implemented through the Corporations Amendment (Corporate Reporting Reform) Bill 2010, and the accompanying Regulations.
Copies of draft amendments, the explanatory material and the regulation impact statement can be obtained from the Treasury website: www.treasury.gov.au.
The closing date for submissions is 3 February 2010.
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