The Parliamentary Secretary to the Treasurer, the Hon Bernie Ripoll MP, welcomed the passage yesterday of the Corporations Legislation Amendment (Audit Enhancement) Bill. The Bill implements important amendments to Australia's audit quality framework.
"The changes contained in this Bill ensure that Australia's audit quality framework continues to be in line with international best practice", Mr Ripoll said.
"The Government is committed to ensuring the market has confidence in Australia's corporate governance standards by maintaining a robust and stable audit regime."
The Bill allows directors the flexibility to extend the five-year auditor rotation period by up to two years, provided auditor independence and audit quality can be maintained.
The Bill also requires the publication of a transparency report by individual auditors and audit firms that audit more than ten significant entities in a year, thereby ensuring that factual information is publicly available about firms who audit listed and other publicly important entities such as banks and insurance companies.
The Bill amends the role of the Financial Reporting Council regarding auditor independence, replacing it with a strategic policy role of advising the Minister and professional accounting bodies on audit quality in Australia.
Finally, where ASIC believes an audit firm has not taken appropriate remedial action to remedy a failure to comply with relevant auditing standards, codes of conduct, or requirements under the Corporations Act 2001, the Bill will allow ASIC to publish audit deficiency reports. In appropriate cases, the Bill will allow ASIC to communicate its concerns directly with an audited company.
19 June 2012