CPA Australia supports ANAO’s report to strengthen audit oversight
Australian accounting body CPA Australia has expressed support for the Australian National Audit Office’s (ANAO) performance audit of the Australian Securities and Investments Commission’s (ASIC) regulation of registered company auditors (RCAs).
This audit concluded that ASIC’s oversight is “partly effective”.
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CPA Australia’s Audit and Assurance lead Tiffany Tan noted that although governance frameworks are in place, the lack of clear performance indicators undermines both transparency and accountability.
Tan said: “Registered company auditors play a critical role in safeguarding Australia’s financial markets. The ANAO report highlights key areas for improvement, and we commend ASIC for taking early steps to implement several recommendations.
“Strengthening audit regulation is an important issue for the profession. We welcome ASIC’s early initiatives and reiterate our commitment to a collective solution that enhances audit quality and market integrity.
“The report is an opportunity to reflect, improve and strengthen trust in the system that is so crucial to upholding the integrity of our financial markets.”
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By GlobalDataThe ANAO report identified several key areas where improvements can be made, including performance measurement, remediation and follow-up, enforcement priorities, stakeholder engagement and ministerial expectations.
The ANAO emphasised the need for more precise metrics to determine whether ASIC’s interventions are effectively enhancing audit quality.
Regarding the aspect on performance measurement, CPA Australia recommends improving the clarity of surveillance reporting by introducing a tiered classification system – such as observation, deficiency and significant issue – along with contextual analysis.
This approach would help companies better understand the practical implications of findings and support more meaningful improvements in audit quality.
Enhancing remediation processes is crucial to ensure that identified deficiencies are addressed in a timely and effective manner.
CPA Australia has welcomed ASIC’s commitment to strengthening this aspect of its oversight programme.
The ANAO report observed that most of ASIC’s enforcement actions have focused on administrative breaches rather than directly on audit quality issues.
CPA Australia has encouraged ongoing dialogue to ensure that enforcement activities are more closely aligned with audit quality objectives.
Addressing stakeholder engagement, the ANAO report emphasised that enhancing transparency and promoting collaboration with the auditing profession are vital for achieving common goals.
CPA Australia stated that it remains committed to supporting greater stakeholder engagement.
With regard to ministerial expectations, the report stated that updating ASIC’s statement of expectations is important to ensure that regulatory priorities keep pace with emerging risks, such as those related to sustainability reporting.
CPA Australia welcomed ASIC’s 2024/25 surveillance programme, which includes an increase in audit file reviews and the utilisation of a random selection process.
The accounting body stated that it views these measures as important advancements that will enhance the robustness of audit oversight.
“CPA Australia stands ready to work with ASIC and other stakeholders to implement these changes and strengthen trust in Australia’s financial reporting framework,” said Tan.
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