Australia Revises Audit System to Improve Audit Quality
(Sunnyvale, CA) - The Australian government has passed a bill which would give the ASIC (Australian
Securities and Investments Commission) greater powers to check audit firms lacking in quality control.
The Corporations Legislation Amendment (Audit Enhancement) Bill 2012 introduced early this year
allows the ASIC to issue an audit deficiency report to individual audit firms if it identifies any deficiency
in its quality control system or its auditing processes which could affect the quality of an audit.
Additional changes to the Australian audit system following the Bill are as follows:
The new legislation will eliminate duplication of internal audit inspection responsibilities.
The ASIC holds the right to communicate directly with the concerned audited body. Audit firms
that audit 10 or more significant entities need to put out a yearly transparency report.
The legislation allows a two year extension to the present five-year auditor rotation
requirement where it does not give rise to conflict of interests.
Read also on: doing business overseas, international financial reporting, transfer pricing audit