Goldsmith Paul: Accounting Infrastructure Reform Bill — In CommitteeText is incorporated into the Bound VolumeGoldsmith Paul: Accounting Infrastructure Reform Bill — In Committee[Sitting date: 28 October 2014. Volume:701;Page:316. Text is incorporated into the Bound Volume.]Hon PAUL GOLDSMITH (Minister of Commerce and Consumer Affairs):I do want to start by acknowledging the efforts of Jonathan Young as chairman of the Commerce Committee and my predecessor Craig Foss in bringing this legislation to the House. I do want to acknowledge the spirit of bipartisanship that we have seen on this issue which was so evident amongst my supporters in Epsom as well. I would like to carry that on in this area.I think it would be useful at this stage just to quickly remind the Committee of the four sets of changes that this piece of legislation brings in to improve accounting market performance in financial reporting settings. Subpart 4 deals with changes to the New Zealand Institute of Chartered Accountants Act 1996. The function of that Act is to require the New Zealand Institute of Chartered Accountants to regulate its members in the public interest and the non-regulatory functions including the promotion of quality expertise and integrity in the New Zealand accounting profession. The changes in this bill will permit the institute which has about 30000 members to complete a merger with the Institute of Chartered Accountants in Australia. Subpart 4 deals with those details and enables the benefits of the merger to go ahead.Subpart 1 which was discussed earlier on covers the changes to the Auditor Regulation Act. That 2011 Act prohibited bodies corporate from carrying out audits of financial statements prepared by financial markets conduct reporting entities. There was no real clear public policy purpose in that and so the Accounting Infrastructure Reform Bill removes that prohibition maintaining auditor independence and audit quality but also allowing flexibility around the arrangements. I do want to reassure the previous speaker Mr Nash who was worried about a review—Hon Annette King: Faafoi was the last speaker.Hon PAUL GOLDSMITH: —the previous speaker bar one—of the formal assurance process. I can assure the member that review is a formal assurance process that is subject to assurance standards issued by the external reporting board. It is a lower level of assurance than the audit but it still requires the auditor to carry out rigorous assessments.Subpart 3 deals with the Financial Reporting Act and changes there. Under the old legislation only members of the New Zealand Institute of Chartered Accountants and certain overseas-qualified persons were able to carry out statutory accounting functions. The Accounting Infrastructure Reform Bill broadens that so that all appropriately qualified New Zealand members of an accounting professional body can operate as accountants in New Zealand. That is all about expanding the base of qualified accountants in New Zealand.Finally Subpart 2 deals with the Charities Act which as has been noted by previous speakers allows registered charities with an annual operating expenditure of $500000 or more to have their financial statements audited or reviewed by accountants. We think that is an appropriate measure to be set.All in all I think we have got a good start here and on that basis I am sure that we can iron out any further details as the evening progresses. Thank you.