ANAO deep dives on ASIC regulation of big audit | Australian Markets

The Australian Securities and Investments Commission (ASIC) has been positioned underneath scrutiny by the Auditor-General.

The Australian National Audit Office (ANAO) has known as for submissions to an audit it’s endeavor to “assess the effectiveness of the ASIC’s regulation of registered company auditors”.

The audit comes on the back of the controversy which has surrounded the big 4 audit firms within the wake of the conduct of PwC which was the subject of close scrutiny by the Parliamentary Joint Committee on Corporations and Financial Services.

The ANAO mentioned it proposes to look at the next points:

• Are ASIC’s governance preparations and the design of regulatory actions for registered company auditors match for function?
• Has ASIC appropriately carried out regulatory actions for registered company auditors?

The Parliamentary Committee report on Ethics and Professional Accountability and Structural Challenges within the Audit, Assurance and Consultancy Industry delivered damning suggestions together with not allowing PWC to tender for Government work till after investigations and remedial motion is accomplished.

The committee additionally really useful the Government commission “an appropriate body to review and make recommendations on the long-term goal of regulation of large partnerships, including in relation to:” the suitable regulator and its powers, relevant governance rules, clear reporting obligations, penalties for breach, and a roadmap for implementation given the complexities of overlapping jurisdiction”.

The committee additionally really useful that the Australian Securities and Investments Commission:

• re-establish a program of random audit inspections;
• complement its present risk-based strategy by additionally reviewing audit recordsdata the place conflicts of curiosity come up from the Big Four companies offering different companies to their audit purchasers (noting that such conflicts shouldn’t happen from the time of implementation of operational separation); and
• increase the extent of assets that it devotes to financial report inspections and audit inspections till there’s a vital enchancment in audit high quality.