Our members endorse the statement in the Consultation Paper that ‘Confidence in the audit-profession and quality of audit services underpins the effectiveness of the financial reporting framework in Australia, and fosters confidence in the integrity of the capital markets’ (page 7). [...] Middle-level managers channel the culture as set at the top to the business lines – in most organisations the ‘mood in the middle’ is as instructive about an organisation’s culture as the behaviour of those at the top of the organisation.10 Middle-level management demonstrates daily the incentives an organisation values. [...] The Accounting Professional and Ethical Standards Board (APESB) Submission to the PJC Inquiry proposed that the Committee ‘consider the development of a standard (based on the UK FRC's Audit Firm Governance Code) that focuses on the culture and governance of large professional services firms in the Australian environment as an enhancement to the current regulatory environment.16 Our members consid. [...] Our members support CAANZ’S suggestion there be consideration of the scope of ASIC’s audit/audit firm oversight, the industry funding model, and regulatory capability, performance and accountability.28 Our members strongly support the continuation of the audit surveillance program given the valuable oversight function it provides and the important insights the findings provide to companies on the. [...] The audit committee, where there is one, is typically actively engaged in the selection and appointment of the auditor and will recommend the appointment to the board for approval.36 Our members support the principle that shareholders and boards should be responsible for making this decision in the best interests of the company and would be reluctant to interfere with companies’ ability to choose.
Authors
- Pages
- 13
- Published in
- Australia
Table of Contents
- RE Regulation of accounting auditing and consulting firms in Australia Consultation Paper Consultation Paper 1
- Who we are 1
- Executive Summary 2
- Responses to consultation questions 3
- Governance 3
- 1. Are there adequate incentives to have appropriate governance practices in partnership 3
- Inquiry into Ethics and Professional Accountability Structural Challenges in the Audit Assurance and Consultancy Industry 3
- Theoretically general partners ought to be more careful about wrongdoing as they are jointly liable for claims against the firmThis is equally so for general partners of incorporated partnerships who 3
- Governance Foundations Governance Institute of Australia website. ASIC Information Sheet 196 Audit Quality The role of directors and audit committees ASIC website. 3
- As for criminal liability the absence of legal personality for partnership means that partners bear criminal responsibility as individuals. 4
- Managing Culture A good practice guide 4
- 2. How should governance mechanisms operate in large accounting partnerships Does this reflect 6
- 3. Are there any key issues that are not captured above in relation to the governance mechanisms 6
- 4. Are the current partnership limits fit for purpose for accounting firms If not what factors should guide decisions on an appropriate partnership limit and how should the limit be applied 7
- Professional standards regulations and laws 7
- 5. Are conflicts of interest managed appropriately by auditing and accounting practitioners If not what could be done to improve the management of conflicts of interest 7
- Code of Ethics for Professional Accountants 7
- 8. Are there any key issues that are not captured above in relation to the adequacy of standards regulations and laws 8
- Transparency public information and reporting 8
- Enforcement and standard setting 9
- 11. Does the preceding section capture the regulatory overlapsgaps that should be addressed in audit tax and insolvency How could gaps or overlaps be addressed 9
- 12. Are the powers and resources dedicated to regulatory oversight sufficient 9
- 13. Are there any factors limiting the capacity of professional bodies to effectively carry out their self-regulation function 9
- 14. Are the sanctions imposed for rule violations proportionate and effective in deterring future misconduct 9
- 15. What are the costs and benefits of digital financial reporting 10
- Protection of whistleblowers 10
- 16. What mechanisms are in place for whistleblowers to report corruption rule-breaking or other unethical conduct in your organisation or industry Do these mechanisms provide sufficient protection 10
- Competition resilience of the audit sector 12
- 18. Is there sufficient competition to provide clients with choice in selecting accounting and audit services in the Australian market If not what factors prevent or impede such competition 12
- While market concentration in large audit firms is recognised it is not perceived to be negatively impacting the capacity of firms to source quality independent audit services. 12
- 20. What prevents top 200 ASX-listed companies switching to a mid-tier firm as their company auditor 12
- See Footnote 18 at page 2. For listed companies see the Corporate Governance Principles and Recommendations 4 edition Recommendation 4.1 for the role of the audit committee. 12
- 21. Do the top 200 ASX-listed companies have any policies or practices that have the effect of excluding mid-tier firms as company auditors 13
