Login
iscover
Resourcing constraints have impeded ASIC’s ability to regulate registered company auditors, CA ANZ said.
Resourcing constraints hinder ASIC’s ability to regulate auditors, CA ANZ says
01 May 2025
•
8 minute read
CA ANZ warned that a lack of resourcing was hindering the Australian Security and Investment Commission (ASIC)’s ability to effectively regulate registered company auditors (RCAs), in a submission to the Australian National Audit Office (ANAO)’s performance review of ASIC.
“ASIC’s team is working hard to meet their mandate. However, many of the issues to be addressed will require an increase in ASIC’s resourcing,” CA ANZ said in its submission on Tuesday.
You’re out of free articles for this month
To continue reading the rest of this article, please log in.
Create free account to get unlimited news articles and more!
“If the government wishes to have a world class effective and efficient audit regulator, it must be properly resourced and staffed.”
ASIC’s ability to regulate auditors is paramount to promoting transparency and accountability in financial reporting. This trust is important to safeguard the interests of investors and other stakeholders in the economy, CA ANZ said.
Since 2017, ASIC has operated under an industry funding model which levies regulated entities and individuals to fund their regulatory processes. CA ANZ said that the cost on their members had increased substantially, while the number of audit file surveillances had decreased, as had the number of ASIC staff on financial reporting and audit teams.
CA ANZ recommended that ASIC’s funding should be increased in order to boost the number of audit files subjected to review annually. In the 2022-23 and 2023-24 periods, 15 files were reviewed across 6 firms, which CA ANZ described as a ‘very low number of files’ compared to the population of regulated entities.
“A nominally small sample calls into question the robustness of overall regulation, particularly where it is not explained,” CA ANZ warned.
They added that ASIC’s surveillance program had grown to have a lack of clarity, and suggested that ASIC should publish a strategic plan for its program including surveillance objectives, key performance indicators and minimum criteria, such as frequency of inspections for individual RCAs.
CA ANZ also said that the ASIC staff who performed RCA reviews were typically junior and lacked the experience necessary to review complex audit matters. They recommended that ASIC’s surveillance team recruit more senior staff with recent audit experience, to improve the effectiveness of the surveillance review process.
ASIC also lacked independence mechanisms that would prevent ex-employees of audit firms from being allocated to conduct reviews on companies they had recently left, CA ANZ pointed out. They urged ASIC to establish a ‘cooling off’ period to ensure the objectivity and independence of their RCA reviewers.
CA ANZ acknowledged that member feedback had shown that ASIC’s efforts and adjustments in recent years had resulted in some clear improvements. However, resourcing constraints and structural factors continued to impact ASIC’s ability to perform regulatory functions in relation to RCAs.
“ASIC’s regulation of RCAs is crucial to protecting to the integrity of Australia’s capital markets, investor confidence and maintaining a strong audit profession within Australia,” CA ANZ said.
“It is vital that they perform this role efficiently and effectively to ensure that high audit quality is achieved.”
You need to be a member to post comments. Become a member for free today!
