Media Release
2008 / 02 – 25 February 2008
FRC releases report on quality review programmes and disciplinary procedures of the professional accounting bodies
Specific changes to the current financial regulatory framework are not warranted, according to a report released today by the Financial Reporting Council (FRC).
The FRC commissioned The Allen Consulting Group (ACG), in 2007, to assess the findings and recommendations made in two consultant reviews conducted in 2006 on quality reviews and disciplinary procedures of the professional accounting bodies.
Mr Jeffrey Lucy AM, Chairman of the FRC, said that while the two previous review reports recommended changes to the regulatory framework, the ACG report suggests there is fatigue within the profession due to the numerous regulatory framework changes that have emerged from CLERP 9.
“Further reform will be more effective if the profession is given a period in which to adjust to recent changes, such as the operation of the Audit Quality Review Board and the impact of auditing standards having legal force of law since 1 July 2006,” Mr Lucy said.
The report outlines eight recommendations for the FRC to:
- analyse market confidence in auditor independence
- improve understanding of the current regulatory framework
- consider whether there is a case for regulatory change in light of the risk to market confidence in auditor independence
- identify opportunities to reduce the review burden on audit firms while maintaining an acceptable level of market confidence in auditor independence
- formally request access to files of professional body members to monitor the quality review process
- revise its role to target overall audit quality, in order to reflect that audit independence is part of audit quality
- examine further the robustness of auditor independence regulation
- examine the costs and benefits of aspects of the UK model that could improve the performance of the Australian regulatory framework, particularly to provide greater information on disciplinary decisions
The Allen Consulting Group report is available at www.frc.gov.au.
The FRC is seeking public comments on the consultant’ s recommendations. Comments should be sent to the FRC Secretary at frcsecretary@treasury.gov.au by 31 March 2008.
Media Enquiries:
Ms Suzanne Howarth,
FRC Secretary
Email: frcsecretary@treasury.gov.au
Telephone: +61 2 6263 3144