The government will provide $800,000 over three years from 2019-20 to the Auditing and Assurance Standards Board in a bid to improve audit quality in Australia.
The funding, announced in the federal budget, aims to give increased support for the Financial Reporting Council’s Audit Quality Action Plan, and to support the chair’s three year appointment to the International Accounting Standards Board.
Earlier this year, ASIC commissioner John Price said that further work and additional strategies were required to improve audit quality after its audit inspection program found that one in five audits did not receive reasonable assurance that the company’s financial report was free from material misstatement.
Similarly, the Joint Committee on Corporations and Financial Services believes there is merit for Australian audit industry to undergo “serious review”, noting that audit quality is an international problem with some “deep-rooted problems” in the audit market.
The UK’s competition watchdog has also recognised audit quality as an issue, and has proposed changes to the audit space in a bid to break up the dominance of the big four audit firms and split the audit function.