Establishing External Reporting Australia's standard-setting boards

Treasury has released an exposure draft determination to establish the standard setting boards of External Reporting Australia, the new body created by the Treasury Laws Amendment (Financial Reporting System Reform) Act 2026, which received royal assent on 7 July 2026. External Reporting Australia merges the Financial Reporting Council, the Australian Accounting Standards Board and the Auditing and Assurance Standards Board into a single body from 1 December 2026, intended to create more flexible institutional arrangements for standard setting and to accommodate the new sustainability standards function.

The exposure draft instrument, issued under the Australian Securities and Investments Commission Act 2001, would establish three standard setting boards under External Reporting Australia, responsible respectively for accounting standards, auditing and assurance standards, and sustainability standards. The instrument sets out the functions, powers and operating procedures of each board. Because the Governing Council of External Reporting Australia does not formally exist until 1 December 2026, the instrument is being made in anticipation of its authorisation by the Financial Reporting Council acting under existing transitional powers.

Expressions of interest to participate in a stakeholder roundtable closed on 28 September 2026, and written submissions on the exposure draft close on 15 October 2026. The governance arrangements proposed are primarily institutional and procedural, and the consultation does not itself propose changes to the substantive accounting, auditing or sustainability standards that the new boards will eventually administer.