Submission to Treasury on Audit Quality Review
- Date:07 May 2010
- Type:Policy and advocacy: Submission
This submission to Treasury is in response to the discussion paper entitled Audit Quality in Australia: A Strategic Review.
As directors are ultimately responsible for the company’s financial reports and for the audit process, the Australian Institute of Company Directors is interested to ensure that audit quality in Australia continues to be of a high standard and that the audit regulation framework strikes the appropriate balance between business efficiency and regulatory compliance.
Our submission to Treasury included the following comments:
- Even though the current auditor rotation requirements appear to be working effectively, there may be some merit in extending the mandatory rotation period for some entities;
- Overseas regulatory developments should not be adopted into Australia for the sake of consistency alone;
- The increasing complexity of International Financial Reporting Standards (IFRS) and its ability to hinder regulatory reform in Australia, is becoming an issue of increasing concern to directors;
- There does not appear to be a compelling reason to move the requirement to establish an audit committee from the Listing Rules into the Corporations Act;
- The requirement for companies in the S&P/ASX All Ordinaries index to establish an audit committee should not be extended to all listed companies;
- The requirement for companies in the S&P/ASX 300 to comply with the ASX Corporate Governance Council Principles and Recommendations regarding the composition, operation and responsibilities of the audit committee should not be extended to all companies in the S&P/ASX All Ordinaries Index; and
- directors who serve as members of the audit committee do not prima facie have a higher standard of care and diligence than other board members.
Download our Submission to Treasury Audit Quality Review (PDF 5.2MB)