''Corporate Law Economic Reform Program (Audit Reform & Corporate Disclosure) Act 2004'', commonly called CLERP 9, modified the Corporations Act 2001 (Commonwealth) which governs

corporate law Corporate law (also known as company law or enterprise law) is the body of law governing the rights, relations, and conduct of persons, companies, organizations and businesses. The term refers to the legal practice of law relating to corpora ...

Australia Australia, officially the Commonwealth of Australia, is a country comprising mainland Australia, the mainland of the Australia (continent), Australian continent, the island of Tasmania and list of islands of Australia, numerous smaller isl ...

. It was enacted in July 2004. The changes were based on the reform proposals contained in the CLERP 9 discussion paper, ''Corporation disclosure - strengthening the financial reporting framework'', which was released by the Australian government in September 2002. The 2004 amendments also enacted some reforms flowing from the recommendations in the Report of the

HIH Insurance HIH Insurance was Australia's second-largest insurance company before it was placed into provisional liquidation on 15 March 2001. The demise of HIH is considered to be the largest corporate collapse in Australia's history, with liquidators e ...

Royal Commission A royal commission is a major ad-hoc formal public inquiry into a defined issue in some monarchies. They have been held in the United Kingdom, Australia, Canada, New Zealand, Norway, Malaysia, Mauritius and Saudi Arabia. In republics an equi ...

released in April 2003. The important reforms to the Corporations Act included: * changes to continuous disclosure offence provisions, including giving ASIC the power to issue infringement notices. * changes to financial reporting, including requiring the CEO and CFO sign-off to the board, and Management Discussion & Analysis (MD&A) disclosure in the Annual Report. * the introduction of a non-binding vote on remuneration reports and expanded executive remuneration * new provisions pertaining to auditor independence, and amendments affecting the audit function and audit oversight. * licensing obligations for financial services licensees to manage conflicts of interest and address analysts independence. * amendments to the fundraising provisions in Chapters 6D and 7 of the Corporations Act. The CLERP 9 changes were intended to improve investor confidence in relation to listed corporations and their financial reports. The evidence regarding their effectiveness in this regard remains mixed. There is some evidence that changes affecting the board of directors were more important to small shareholders than large shareholders. The costs and benefits of changes affecting auditors remain more contentious. Clout, V., Chappelle, E. & Gandhi, N. The impact of auditor independence regulations on established and emerging firms. ''Accounting Research Journal'' Vol. 26(2) 2013:88-108

References

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External links

CLERP 9 page at Australian Securities and Investment Commission
2004 in Australian law Acts of the Parliament of Australia Australian corporate law