G100 submission to the inquiry of regulation of auditing in Australia

Earlier this year the Group of 100 (G100) made a submission to the Parliamentary Joint Committee on Corporations and Financial Services, regarding the inquiry into the regulation of auditing in Australia. The investigation came in shortly after Senator Deborah O’Neill moved a motion to this effect at the beginning of August. 

The terms of reference of the inquiry entail an investigation of a range of aspects, such as:

• The relationship between audit and non-audit services, and potential conflicts of interests;
• Level of competition in the audit profession;
• Audit quality and the effectiveness of audit in detecting and reporting ‘fraud and misconduct’;
• Changes in the role of audit and the scope of audit products;
• Effectiveness and appropriateness of legislation, regulation and licensing;
• Adequacy and performance of regulatory, standards, disciplinary and other bodies.

The recent FRC survey confirmed that corporates, and those responsible for their governance on behalf of investors, do not recognise a significant issue with the external audit in Australia. Read more here.

As you may know, G100 is represented on the ASIC Committee for Reporting and Auditing, and furthermore, we have made public comments along the lines of:

• Corporate Australia through the G100 believes that external auditors in Australia are in the main doing their job well;
• That there is an overlap with the continuous disclosure regime that protects investors;
• That corporates appreciate being able to access the financial and technical expertise of individuals through one firm rather than through a myriad of agreements; and
• That Boards, Management and Auditors take their respective roles concerning corporate governance, establishment and monitoring of internal controls and independence very seriously without the need for further regulatory intervention.