Chartered Accountants ANZ (CA ANZ) has doubled down on its calls for the Australian Government to clarify the government’s role and scope as a regulator of audits, a systemically important function for our capital markets and economy.
In its submission to Treasury’s consultation paper on the regulation of accounting, auditing and consulting firms in Australia, CA ANZ has expressed concern that the paper has further confused, rather than clarified, the regulatory ecosystem for its sector.
CA ANZ’s submission to Treasury said there are clear gaps in the jurisdiction and resourcing for government regulation of audit firms, and potential over-reliance on non-statutory regulation, which includes CA ANZ.
“As a private membership body, CA ANZ plays a very important role for our profession. But when it comes to systemically important audits, everyone in the space relies on having a regulator with the teeth that government can bring to bear,” said Ainslie van Onselen, CEO of Chartered Accountants ANZ.
“This is exactly what the government committed to twenty years ago when it passed the Corporate Law Economic Report Program (Audit Reform and Corporate Disclosure) Act 2004 introducing statutory auditor and financial reporting obligations, taking on the chief role for audit regulation in Australia.
“This is a pivotal moment for the Australian Government to reenergise its commitment to effective regulation of the sector, while ensuring this reform process strikes the right balance.”
CA ANZ’s submission puts forward 11 recommendations:
- There is an urgent need for government to clarify its intended roles of government and professional regulation of audit in Australia.
- Clarify and strengthen ASIC’s jurisdiction and resources to effectively regulate audit firms including monitoring and enforcement of audit quality, governance and independence requirements at the firm level.
- Consider an audit firm governance code supplementing the existing governance and leadership requirements prescribed for firms in audit quality standards.
- Consider and respond to the relevant conclusions and recommendations of the Parliamentary Joint Committee on Corporations and Financial Services inquiry into Regulation of auditing in Australia.
- Implement a comprehensive periodic review of the external auditor for Australian listed companies, noting relevant guidance already issued by the AUASB jointly with the Australian Institute of Company Directors (as seen in Canada).
- Require pre-approval of audit and non-audit services by the Audit Committee for listed companies.
- Improve transparency and reporting by large professional services firms based on key stakeholder needs.
- Reintroduction of reporting by ASIC on Audit quality measures, indicators and other information relevant for stakeholders to understand audit quality.
- Mandate digital financial reporting for listed companies in Australia.
- Strengthen whistleblower protections with consideration of Protecting Australia’s Whistleblowers: The Federal Roadmap as a well thought out and internationally benchmarked set of measures.
- Amend relevant Corporations Act provisions so that audit team members – as eligible whistleblower report recipients – are treated as an entity and can share information within the team.
Ms van Onselen said CA ANZ plays an important role in the co-regulatory system.
“We have appeared at various Parliamentary inquiries, expressing deep disappointment and concern about the behaviour of a small few in our profession. We have also taken steps to correct the misconception that CA ANZ is a front-line regulator in Australia,” she said.
To read a copy of the submission, visit www.charteredaccountantsanz.com
ENDS
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Chartered Accountants Australia and New Zealand represents more than 136,000 financial professionals, supporting them to make a difference to the businesses, organisations and communities in which they work and live. Chartered Accountants are known as Difference Makers. The depth and breadth of their expertise helps them to see the big picture and chart the best course of action.
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