How are our standards set?

Accounting standards engender confidence in the financial reporting of the private, public and not-for-profit sectors.

Audit & Assurance standards ensure trust in an organisation's financial reports.

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Process for issuing standards  

Section 22 of the Financial Reporting Act 2013 requires us to ensure all who would be affected by the issue of a standard or an amendment are consulted and have an opportunity to provide feedback, suggestions and insights.

To this end, the XRB Board has developed a set of due process guidelines which we must follow before issuing a standard, amendment to a standard, or other pronouncement. 

For a detailed description of how our standards are set, the following documents below set out the full processes:

Approval of Standards

Before a new standard (or amendment, authoritative notice or other pronouncement for issue) can be approved, the standard-setting Board must be assured that:

  • reasonable steps have been taken to consult with persons or organisations likely to be affected by the proposed standard/amendment/pronouncement
  • the proposed standard/amendment/pronouncement is likely to achieve its objectives
  • the advantages of the proposed standard/amendment/pronouncement are sufficient to justify its issue.

The standard-setting Board prepares a certificate signing memo which outlines the due process followed, the major issues raised by stakeholders during that process, and the conclusions reached by the standard-setting Board in considering them.

The XRB Board Chair signs the certificate and the standard-setting Board can then issue the standard/amendment/pronouncement.

Public notification

When we issue a standard, amendment, or pronouncement we notify this publicly on our website and through email via our Accounting Alerts and Audit & Assurance Alerts.

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Changes to standards are also posted to our Recent Approvals pages:

Regulation of Standards

Standards are treated as Regulations and must be tabled in Parliament within 16 sitting days of the standard (or amendment) being issued.

Parliament may, by resolution within 21 sitting days, disallow a standard.

The parliamentary process surrounding this involves consideration of the issued standard by the Regulations Review Committee.

The standard setting process is governed by the Financial Reporting Act 2013, which you can learn more about here. 

Last updated: 20 April 2022