CA ANZ DOUBLES UP CALL FOR REASONABLE ACCOUNTING SECTOR REGULATION

ANZ Auditor General (CA ANZ) doubled down on his calls for Australian government volabout explain government role and scope as a regulator ANDaudits, i.e. functions of systemic importance for our capital markets AND economy.

In his submission to Treasury’s consultation paper on the regulation of accounting, auditing and consulting firms in AustraliaCA ANZ expressed concern that the document confused, rather than clarified, the regulatory ecosystem that applies to its sector.

CA ANZ’s letter to Treasury said there were clear gaps in jurisdiction and resources required for government regulation of audit firms, as well as a potential over-reliance on non-statutory regulation, of which CA ANZ also falls.

“As a private member organization, CA ANZ plays a very important role in our profession. But when it comes to systemically important audits, everyone in the industry relies on having a regulator with teeth that the government can use,” 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 Reporting Scheme (Audit Reform and Corporate Disclosure) Act 2004 introducing statutory audit and financial reporting obligations, playing a central role in the regulation of audit in Australia.

“This is a key moment for the Australian Government to renew its commitment to effectively regulating the sector, while ensuring the reform process strikes the right balance.”

The CA ANZ application contains 11 recommendations:

There is an urgent need for the Government to clarify its intended role in government and professional regulation of auditing in Australia.
Clarify and strengthen ASIC’s jurisdiction and resources to effectively regulate audit firms, including monitoring and enforcing audit quality, governance and independence requirements at firm level.
Consider introducing an audit firm corporate governance code, complementing existing corporate governance and leadership requirements set out for firms in audit quality standards.

Consideration of and response to relevant findings and recommendations of the Joint Parliamentary Committee on Corporations and Financial Services on the Inquiry Audit regulations in Australia.
Implementation of a comprehensive periodic external auditor review for Australian listed companies, taking into account relevant guidance already issued by the AUASB in conjunction with the Australian Institute of Company Directors (similar to that in Canada).
Require prior approval from the Audit Committee for audit and non-audit services for listed companies.
Improve transparency and reporting for large professional services firms based on key stakeholder needs.
Reintroduce ASIC reporting on audit quality metrics, indicators and other information relevant to stakeholders to understand audit quality.
Outsourcing digital financial reporting to listed companies in Australia.
Strengthen whistleblower protection, taking into account the ‘Protecting Whistleblowers in Australia: A Federal Action Plan’ as a well-considered and internationally comparable set of measures.
Amend the relevant provisions of the Companies Act so that audit team members – as eligible recipients of whistleblower reports – are treated as a whole and can exchange information within the team.

Ms van Onselen said CA ANZ played an important role in the co-regulatory system.

“We have appeared at various parliamentary inquiries expressing our deep disappointment and concern about the behaviour of a small number of people in our profession. We have also taken steps to correct a misconception that CA ANZ is the primary regulator in Australia,” she said.

To read a copy of the report, please visit www.charteredaccountantsanz.com

ENDS 

Contact with the media 

Gillian Bowen
M +61 (0)411 485 421 E: [email protected]  

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