ASIC to target auditor misconduct in 2025
The corporate regulator has revealed its plans to ramp up action against auditor misconduct in the upcoming year.
ASIC has announced it will turn its focus to target auditor misconduct following increased public scrutiny and attention over the past year.
The Corporate Regulator highlighted its enforcement priorities for the year ahead in a recent speech by ASIC deputy chair Sarah Court.
Court said that 2024 was a “significant year” with the other focus areas for 2025 alongside auditors including, unscrupulous property investment schemes, strengthening investigation and prosecution of insider trading, as well as debt management and debt collection.
Court said auditors played a critical role across the financial system as the principal external check on a company’s reporting.
“The integrity of our markets depends on performance of the auditor role with independence and integrity,” she said.
“There has been considerable recent public attention on the role of auditors and audit firms, and indeed a parliamentary joint committee delivered a report on this subject last week.”
“Given this interest and the important and unique role played by auditors, we propose to intensify our oversight and enforcement work in this sector.”
Last month the regulator warned auditors it would be undertaking a data driven surveillance campaign that would involve engaging with auditors “at scale” and using statutory powers to force firms flagged by its systems to hand over information.
ASIC Commissioner Kate O’Rourke said ASIC would use a range of internal and public data sources to identify potential non-compliance with independence and conflicts of interest obligations.
It also follows the release of updated regulatory guidance for the resignation, removal and replacement of auditors.
As previously reported by Accounting Times, among the revisions to the regulatory guide was guidance on how ASIC would exercise powers to give consent to the resignation or removal of an auditor.
Court said ASIC would also focus on areas to protect the best interests of the Australian community in its priorities for 2025.
“Our 2025 enforcement priorities reflect the increased risks consumers are facing that are being driven by cost of living pressures,” she said.
“These priorities are about protecting Australians from financial harm and targeting the people who try to take advantage of them.”
ASIC said its enforcement priorities reflected emerging issues and risks the agency prioritised to detect, investigate and prosecute unlawful conduct affecting consumers, businesses and the economy.
Court also said that ASIC had increased its new investigations this year by 25 per cent in comparison to the previous year.
ASIC also reported an increase in new civil proceedings by 23 per cent and achieved enforcement outcomes across areas from greenwashing to cryptocurrency, predatory lending, high-cost credit and insider trading.
“ASIC’s goal is to help all Australians through promoting market integrity and consumer protection in the Australian financial system,” Court said.
“We take decisive and high-profile enforcement action to protect consumers, address misconduct, punish wrongdoers and importantly, reduce the risk of misconduct in the markets and sectors we regulate.”acoc
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