Government dismisses recommendations from auditing inquiry report
The government says its unnecessary to respond to recommendations from the inquiry despite the push from professional bodies for the recommendations to be adopted.
Treasury recently released responses from the government to a wide range of House Committee Reports and Joint Committee previously undertaken, including the Inquiry into the Regulation of Auditing in Australia.
The final report for the inquiry was released back in November 2020, with the government only releasing its response to the final report this month.
The government stated in its response that a “substantive government response [was] no longer appropriate” given the passage of time since the report was released.
Professional bodies such as Chartered Accountants ANZ have previously urged the government to respond to the recommendations from the inquiry, particularly in light of changes made by ASIC to its audit surveillance program last year.
Following ASIC’s decision to integrate its financial reporting and audit surveillance programs, CA ANZ urged the government to respond to the ten recommendations made by the Regulation of Auditing in Australia Inquiry in its interim report.
The interim report made recommendations such requiring ASIC to formally review the manner in which it publicly reports the periodic findings of its audit inspection program and a requirement for ASIC to publish all future individual audit firm inspection reports on its website.
It also recommended that the APESB consider revising the revising the APES 110 Code of Ethics to include a safeguard that no audit partner can be incentivised, through remuneration advancement or any other means or practice, for selling non-audit services to an audited entity.
In a statement last year, CA ANZ said the inquiry, which started in 2019, looked deeply at audits in Australia, received more than 100 submissions, held several days of hearings and a received plethora of other evidence.
“The Inquiry examined audit regulation, quality, independence, the market and other related matters – and ultimately put forward clear bipartisan conclusions and 10 recommendations,” the professional body said.
CA ANZ said that since the release of the two inquiry reports, directors, auditors and the broader profession had made efforts toward addressing the spirit of the recommendations made by the Parliament’s audit inquiry such as strengthening independence standards, the role of governance and professional scepticism.
“However, a Federal Government response and appropriate consultation and scoping are needed to realise the package of reforms identified through this extensive inquiry process,” it said.
The government is still currently undertaking the inquiry into the audit, assurance and consultancy industry, with further hearings to be held later this week.
The Parliamentary Joint Committee on Corporations and Financial Services is currently undertaking another inquiry into the audit, assurance and consultancy industry, which stemmed from reports about misconduct across the big four firms.
The inquiry is set to hold further hearings this week and will hand down its findings over the coming months.
About the author
