Discuss the below:
Press release:
Legislation to improve the quality and transparency of the auditing process has been introduced into the House of Representatives this week by Parliamentary Secretary to the Treasurer David Bradbury. The Corporations Legislation Amendment (Audit Enhancement) Bill 2012is the result of a Treasury review of audit quality and extensive stakeholder consultation during 2011 on measures that are designed to enhance audit quality and ensure that Australia's regulatory framework remains in line with international best practice.
Measures in the Bill include:
Requiring audit firms to publish an annual transparency report if they conduct audits of 10 or more significant entities
Empowering ASIC to issue an audit deficiency report in relation to an individual audit firm if it identifies an audit deficiency in the auditor's quality control system or the conduct of an audit that may be detrimental to the overall quality of the audit
Removing duplication of ASIC and Financial Reporting Council (FRC) audit inspection responsibilities so that ASIC continues its audit inspection program and the FRC focuses on providing strategic policy advice and reports on the quality of Australian audits.
Allowing ASIC to communicate directly with an audited body.
Allowing a two-year extension to the five-year auditor rotation requirement where it will not give rise to a conflict of interest and will prevent the loss of knowledge and experience where rotation could undermine the quality of the audit.
ICAA report: Reforms to enhance Audit Quality