According to a 2006 National Institute of Accountants in Australia (NIAA) self-assessment, Australia adopted International Financial Reporting Standards (IFRSs) promulgated by the International Accounting Standards Board (IASB) effective January 1, 2005. However, the Deloitte IAS Plus website noted that at the time of issuance, the Australian Standards were not 100% compatible with IFRSs. IFRSs were adopted with some modifications - such as removing options and adding Australian paragraphs - due to the fact that Australian standards, unlike the international standards, are not exclusively meant for the for-profit sector. As a consequence, to bring Australian standards in line with IFRSs, in November 2006, the Australian Accounting Standards Board (AASB) issued Exposure Draft (ED) 151 "Australian Additions to, and Deletions from, IFRSs" for comment. According to the text of ED 151, the adoption of IFRSs in Australia is an ongoing process and the AASB must consider providing new or amended Australian equivalents in line with the amendments made to IFRSs. The Deloitte Accounting Alert of September 2007 noted that in March 2007, the AASB released Amending Standard AASB 2007-4 "Amendments to Australian Accounting Standards arising from ED 151 and Other Amendments" which implements the majority of the proposals in AASB ED 151 and also includes other amendments arising due to changes introduced by the IASB. The update further noted that these amendments will bring Australian standards in line with IFRSs. In addition, the text of the amended Australian standards, except for IAS 26, confirms that Australian standards are in compliance with IFRSs for the for-profit sector. More recently, in line with the IASB "Improvements Project," the AASB adopted Accounting Standard AASB 2008-5 "Amendments to Australian Accounting Standards arising from the Annual Improvements Project." As of May 2008, this standard amends 23 existing AASBs bringing them in line with the changes made to IFRSs.
Australia has had a long-standing policy of convergence and harmonization of national standards with International Standards on Auditing (ISAs) promulgated by the International Auditing and Assurance Standards Board (IAASB). In 2004, this policy was further consolidated with the enactment of the Corporate Law Economic Reform Program and the subsequent issuance of the Financial Reporting Council's (FRC) strategic direction with regard to the Australian auditing framework. In 2005, the FRC directed the Australian standard-setter, the Auditing and Assurance Standards Board (AUASB), to use ISAs as a base for redrafting of Australian standards issued prior to 2004. On May 1, 2006, the Auditing and Assurance Standards Board (AUASB) issued 35 new legally enforceable Australian Auditing Standards (ASAs), following a review of the existing auditing standards. The issuance of the redrafted standards was accomplished in two phases. According to the CPA Australia website, Phase 1 achieved the legal enforceability of the standards while in an ongoing process Phase 2 will focus on enhancement of existing ASAs to bring them in line with the most recent version of ISAs. Following the IAASB's policy, the AUASB has an ongoing Clarity Project to amend the extant ASAs. Under the Corporations Act, the same set of auditing standards is mandatory for listed as well as non-listed companies. With regard to small and medium-size enterprises, the annual report points out that in March 2007, the AUASB released a discussion paper for comment "Auditing Small and Medium-Sized Entities (SMEs)" followed by participation in several other discussion forums. However, the report states that the discussions only revealed a lack of demand for a separate standard on SMEs.
