Company auditor numbers in steady decline, ASIC data reveals
The total number of registered company auditors continues to drop, with company auditors falling by around a third from a decade ago, ASIC data shows.
The number of registered company auditors has fallen five per cent since the end of the 2021–22 financial year down to 3,268 at the start of September this year, according to data from the ASIC register.
ASIC’s annual licensing report released yesterday shows that registered company auditor numbers have consistently declined since 2004.
In the past decade alone, registered company auditors have fallen by 32.6 per cent and by more than half since 2003 when there were 7,025 company auditors in total.
ASIC’s report also indicated that only 118 auditors were approved as company auditors during the 2022–23 financial year. This was an increase from the previous year when only 89 were registered.
Large proportion of company auditors nearing retirement
With around 30 per cent of registered company auditors registered before the year 1990, there is also a significant proportion of company auditors approaching retirement.
Out of the total number of company auditors currently registered, around 28 per cent were first registered in the last 10 years, based on registrations from September 2013 onwards.
Auditors play “significant role” in the financial reporting system
With the audit and consulting industry currently under close scrutiny in the wake of the PwC tax leaks scandal, Treasury has highlighted the critical role that company auditors play in upholding confidence and integrity in markets.
“Audit is a significant element of the broader financial reporting system. It is significant because it constitutes the principal independent, external check on the integrity and reliability of companies’ financial reporting,” Treasury said in a recent submission to the PJC inquiry into the audit, assurance and consulting industry.
“Audits add credibility to companies’ financial statements and increase the confidence that users, including potential investors, creditors, and shareholders, place in those statements. Confidence in the quality of audit and the accounting profession is an important part of the effectiveness of the financial reporting framework in Australia and key to fostering confidence in the integrity of our markets.”
Chartered Accountants ANZ also recently outlined the importance of company auditors in ensuring there is reliable information in capital markets.
CA ANZ said that despite recent concerns raised about ethical misconduct, a recent investor survey it conducted indicated that confidence in Australia’s audited financial reports remains at around 90 per cent and that auditors remain the most trusted intermediary when it comes to protecting investors’ interests, followed by regulators and analysts.
SMSF auditor numbers also in decline
SMSF auditor numbers have seen an even greater decline, falling 14.7 per cent over the 2022–23 financial year, according to the report by ASIC.
ASF Audits head of education Shelley Banton said as the SMSF auditor population drops and the number of SMSFs increases, it will be increasingly important that auditors maximise their use of technology.
The SMSF audit industry continues to see significant consolidation with the latest Class Annual Benchmark Report stating that auditors auditing more than 250 funds accounted for 67.8 per cent of the total market in the 2021 financial year.
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