The Parliamentary Secretary to the Treasurer, Chris Pearce, today introduced the Australian Securities and Investments Commission (Audit Inspection) Bill 2006 into Parliament.
“The Bill will provide a legislative framework to empower the Australian Securities and Investments Commission (ASIC), with the consent of the Minister, to enter into cooperative audit arrangements with foreign regulatory bodies,” Mr Pearce said.
The Bill will enable ASIC to enter into a cooperative audit arrangement with the US Public Company Accounting Oversight Board (PCAOB).
“With the globalisation of capital markets and cross-border operations by many Australian companies, fostering close cooperation between Australian and US regulators is clearly in the public interest,” Mr Pearce said.
“Streamlining the information-gathering process under a joint ASIC/PCAOB audit inspection will produce significant cost savings for Australian audit firms, as they will need to accommodate only one joint inspection, rather than two separate inspections by ASIC and the PCAOB.”
“The Bill will also enhance ASIC’s domestic and international audit inspection powers. This will reduce compliance costs and clarify uncertainty about the scope of ASIC’s existing powers to review audit firms which the Financial Reporting Council identified in its 2004-05 Auditor Independence Report.”
“The Government has implemented several legislative and non-legislative safeguards to get the right balance between ASIC’s statutory responsibilities, and protecting the interests of audit firms and their clients.”
In line with the Government’s response to the Rethinking Regulation Taskforce Report, Mr Pearce said the Government proposes to review the operation of the cooperative arrangement between ASIC and the PCAOB, after the first round of triennial PCAOB inspections in Australia in 2007, to assess whether the joint inspection process has met expectations.
The Bill also contains a technical amendment to a transitional provision relating to auditing standards which will extend the current immunity against criminal liability under section 1455 of the Corporations Act 2001 to cover all financial reports ending on or before 29 June 2007.
“I would like to thank stakeholders for their constructive participation in the consultative process,” Mr Pearce said. “Their input has helped us to shape the legislation.”
“And I’m pleased that after an extensive consultative process, all key stakeholders support the measures in the Bill.”
18 October 2006
CANBERRA
Contact: Andrew Conway 02 6277 2088