Both CPA Australia and Chartered Accountants ANZ have raised questions and concerns regarding the government’s plans to merge Australia's three financial reporting bodies.

Under the proposed plan, the Australian Accounting Standards Board (AASB), Auditing and Assurance Standards Board (AUASB) and the Financial Reporting Council (FRC) would be merged into a single body containing various expert committees.

Both CPA Australia and Chartered Accountants ANZ (CA ANZ) have expressed concerns regarding the short consultation window for the plan, highlighting that the changes could have major implications for Australian businesses.

“Given the complex and sophisticated nature of the professional services industry, such a substantial change to its reporting infrastructure needs to be considered very carefully to avoid any unintended consequences,” said Tiffany Tan, Audit and Assurance Lead for CPA Australia.

“We emphasise the importance of adequate consultation and co-design with key stakeholders,” she added.

“Having less than a month to consult over such wide reaching changes to the profession and all of the subsequent implications is inadequate.”

This sentiment was echoed by CA ANZ, who expressed their general support for the overhaul while flagging key concerns regarding the operation of the new body.

“CA ANZ supports the overall objective of a more flexible arrangement for standards setting to deal with evolving market needs,” said assurance and reporting leader Amir Ghandar.

“However, a 30-day consultation period is not long enough to provide feedback on the most significant shake-up to the Australian standards setting bodies in decades.”

CA ANZ warned that the government’s proposed plan will require further refinement, including “clarifying the demarcation between oversight and standard setting activities, striking a balance between independence and current practical expertise, as well as clarity on how this fits and interacts with other ongoing Treasury consultation processes involving the profession.”

CPA Australia raised similar concerns, advising the Treasury that they should take care to preserve existing functions of the financial reporting bureaus including independence, resource allocation and technical skills.

“Broad technical expertise across multiple sectors is another key foundational pillar to the current standard-setting structure which needs preserving under the new model,” Tiffany Tan said.

“The independence of the two standard-setting boards under the current structure is an important contributor to high quality financial reporting, sustainability reporting and assurance standards,” she continued.

“It is not clear from the proposals whether this critical element will be preserved under the new structure.”

The government is currently seeking feedback regarding the proposed body’s structure, its model for issuing standards, and its mechanisms to ensure transparency and address conflicts of interest.

The consultation will be open until 21 February, and the paper is available on the Treasury website.