Australian Perspective on Oversight of Auditing Standards-Setting

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Australian Perspective on Oversight of Auditing
Standards-Setting
XVII WORLD CONGRESS OF ACCOUNTANTS
Merran H Kelsall Chairman AUASB
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Objectives

• The Context
• Oversight of the Audit Function
• The AUASB
• Operations

3
Background

• Professional Bodies responsible for
• Setting Standards
• Monitoring and Discipline
• Auditors of companies registered under
  corporations legislation

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Background cont

• Corporate Failures
• Impact
• Corporate credibility
• Confidence in financial markets

5
Australian Response

• Pro-regulation
• Increased regulation to restore public confidence
  in Corporate Australia
• Resulted in a new model for the legislative
  framework

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Australian Standard-Setting Oversight Model
The Profession
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The FRC

• The ASIC Act - powers and functions
• Responsibilities
• provides strategic direction to the AUASB and
  AASB
• broad oversight of the standard-setting process
  
• monitoring the effectiveness of auditor
  independence
• quality control
• teaching ethics
• Annual Reporting to the Minister

8
ASIC

• Enforces and regulates company and financial
  services laws to protect consumers, investors
  and creditors
• education/support
• monitoring and compliance
• legal action against auditors
• registration of auditors and enforcing auditor
  independence
• may refer matters to CALDB

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The Profession

• The Profession
• ICAA
• CPA
• NIA
• Professional Conduct

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The AUASB

• Independent Statutory Body
• Primary Roles
• Auditing and Assurance Standards
• Guidance
• International

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The AUASB

• Chairman
• Plus 12 Other Members
• Technical Group

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Financial

• Funding
• Commonwealth Government
• Professional Bodies

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The AUASB

• Specific Legislative Requirements

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The AUASB

• Strategic Direction for AUASB
• Public Interest
• Enforceability
• ISAs used as a base

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The AUASB mission

• To develop, in the public interest, high
  quality auditing and assurance standard and
  related guidance as a means to enhance the
  relevance, reliability and timeliness of
  information provided to users of audit and
  assurance services.

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Operations

• Transparency of the Standard-Setting Process
• Public Meetings
• Exposure Periods for Pronouncement
• Website
• RIS

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Achievements

• 35 legally enforceable Auditing Standards
• Applicable for financial reporting periods
  commencing on or after 1 July 2006

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Significance

• Enforceability
• Regulator Review
• Maintaining Confidence
• The Auditing Standards
• Corporate Reform
• Clarity of obligation
• Documentation

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The Future

• Auditing and Assurance Standards for other
  purposes
• Guidance

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Conclusion

• Evaluation
• Continual Improvement