Australia’s federal government has introduced landmark legislation aimed at overhauling the nation’s financial reporting framework to ensure greater coherence, adaptability and accountability for investors, businesses and regulators.

The Treasury Laws Amendment (Financial Reporting System Reform) Bill 2026, tabled in Parliament this month, proposes the establishment of a single statutory body — External Reporting Australia — that will assume core responsibilities currently distributed across separate standard-setting bodies.

This measure represents the most significant restructuring of the country’s financial reporting architecture in more than two decades and is intended to support investor confidence and maintain the integrity of Australian capital markets.

Under the proposed reforms, External Reporting Australia would consolidate the functions of the Australian Accounting Standards Board, the Auditing and Assurance Standards Board and the Financial Reporting Council into a unified entity responsible for issuing accounting, auditing, assurance and sustainability reporting standards.

The legislation also provides for the creation of dedicated technical standard-setting boards within this new structure, including a specialist sustainability board to reflect the growing importance of environmental, social and governance disclosures in corporate reporting.

Existing standards will continue in force as the new body transitions to its statutory responsibilities.

Treasury officials and the government have emphasised that the reforms are designed to position Australia’s financial reporting system to respond more effectively to evolving local and international developments in accounting and assurance practices.

The unified standard-setting model aims to reduce duplication, streamline governance and enhance flexibility, while retaining robust processes for stakeholder consultation and technical rigour.

The introduction of the Bill follows extensive public consultation on draft amendments and reflects feedback from industry bodies, professional associations and other market participants on the optimal design of the new institutional framework.

Supporters of the reform argue that a consolidated standard-setting architecture will better align Australia with global best practice and meet the demands of increasingly complex financial and sustainability reporting requirements.

The legislation has been welcomed by professional accounting organisations as a positive step toward long-term modernisation, although some have called for clarity on governance arrangements and legislative safeguards to preserve independence and transparency in technical decision-making.

As the Bill proceeds through Parliament’s legislative stages, further scrutiny and debate are expected, with proponents asserting that these reforms will underpin a more competitive, dynamic and trusted financial reporting environment for the Australian economy.