International Journal of Government Auditing – January 2006
Australia
ANAO’s Role in the Implementation of Australian Equivalents to International Financial Reporting Standards
In 2004, Australian Equivalents to International Financial Reporting Standards (AEIFRS) became law and were released by the Australian Accounting Standards Board (AASB).
AEIFRS were introduced to increase the transparency and comparability of financial statements on a global basis by fully adopting International Financial Reporting Standards. AEIFRS apply to all reporting entities in Australia for reporting periods beginning on or after January 1, 2005 . The Australian government sector must report both its 2004-05 and 2005-06 financial information in accordance with AEIFRS.
To date, Australian government entities have made progress with the transition in the following areas:
- inclusion of a note in the 2004-05 financial statements to explain how the transition to AEIFRS is being managed, the key differences in accounting policies arising from the transition, and any known or reliably estimable information about the impact on the financial report had it been prepared using AEIFRS ( the ANAO has audited this disclosure as part of its 2004-05 financial statement audit) and
- preparation of audited AEIFRS opening balance sheets and 2004-05 transitional year financial statements.
In addition to being the external auditor of the AEIFRS financial statements of Australian government entities, the ANAO’s roles and responsibilities in the transition to AEIFRS include providing relevant training, audit work programs, and technical support for its financial statement audit workforce; responding to requests to comment on proposed AEIFRS standards by the AASB; and working through a series of implementation and interpretation issues with government entities.
While all Australian government reporting entities will be affected by the introduction of AEIFRS, the impact will vary depending on the nature of an entity’s operations and the obligations it enters into. Never the less, it is generally accepted, from a financial reporting perspective, that AEIFRS will introduce more volatility into the results reported on an accrual basis, particularly by recognizing more rights and obligations in financial statements and by requiring that the present value of long-term liabilities be measured.
For additional information, contact ANAO: Fax: ++61 (2) 6203 7519 E-mail: ag1@anao.gov.au Web site: www.anao.gov.au