A new survey by Chartered Accountants Australia and New Zealand has found that 87 per cent of retail investors have some degree of confidence in audited financial information.
The figure consists of only 14 per cent who said they have a great deal of confidence, with a majority of 40 per cent indicating that they just had some level of confidence.
One of the top reasons for the level of confidence was down to the fact that investors believed auditing was well regulated.
Conversely, the top reason for a lack of confidence was attributed to auditors not being regulated enough.
Interestingly, investors ranked independent auditors who audit publicly listed companies as the most effective role in advancing investor protection.
CA ANZ reporting and assurance leader Amir Ghandar said these results recognise the long-standing, strong contribution auditors provide to safeguard the Australian market.
“It is company reporting season, so right now thousands of auditors are out there quietly going about the painstaking work needed for reliable information in our capital markets,” Mr Ghandar said.
“These results show the enormous role auditors play in building confidence across our economy.
“The certainty investors have in audited financial statements stems from the reputation risk accompanying any wrongdoing, the belief that auditing is well regulated and that auditors are providing honest and independent third-party scrutiny.”
The survey results come as a parliamentary inquiry has been established to examine the regulation of auditing in the Australian market.
The audit industry has been under intense scrutiny in recent times, with ASIC confirming its new approach to naming and shaming the largest audit firms.
The Joint Committee on Corporations and Financial Services and the Financial Reporting Council have also expressed their concerns about audit quality and the current state of auditor disciplinary functions.
“With a new premium being placed on trusted information by the public, auditors also have to shoulder a big responsibility to preserve this trust,” Mr Ghandar said.
“As a profession, we must strike a balance between helping people understand what we do and bust the myths, while also listening to concerns on where auditing needs to evolve to better meet their needs.
“We welcome the parliamentary inquiry as a forum to have a public conversation to ensure that practice and regulation, as well as the risks and issues audits cover, are keeping pace with expectations of Australians.”
Jotham Lian is the editor of Accountants Daily, the leading source of breaking news, analysis and insight for Australian accounting professionals.
Before joining the team in 2017, Jotham wrote for a range of national mastheads including the Sydney Morning Herald, and Channel NewsAsia.