Media Release
2008 / 04 – 25 February 2008
The Australian auditor independence framework remains effective, says FRC
The auditor independence framework continues to operate effectively, according to the annual report on auditor independence released today by the Financial Reporting Council (FRC).
The report indicates that audit firms have made significant progress in the adoption and refinement of the systems and processes they use to ensure compliance with auditor independence requirements. However, the FRC noted that some small to medium-size audit firms, which were reviewed under the Australian Securities and Investments Commission’s (ASIC’s) audit inspection programme for the first time, had not taken a proactive approach to planning and implementing effective policies, systems and processes to ensure compliance with legislative requirements for audit independence.
Mr Jeffrey Lucy AM, Chairman of the FRC, said that there would be merit in ASIC and the professional accounting bodies implementing educative programmes targeted particularly at those firms.
“While the systems used by audit firms to ensure compliance with independence requirements are generally working well, some audit firms do not appear to have a thorough understanding of the legislative and professional requirements on auditor independence,” Mr Lucy said.
The report also notes that the professional bodies already have in place continuing professional development programs to ensure members are adequately informed about and are conscious of the auditor independence requirements.
The FRC is required, by subsection 235BA(1) of the ASIC Act, to prepare an annual report on the performance of its auditor independence functions, the findings and conclusions reached by the FRC in performing those functions, and the actions (if any) taken by the FRC. The FRC auditor independence report is available at www.frc.gov.au.
Media Enquiries:
Ms Suzanne Howarth,
FRC Secretary
Email: frcsecretary@treasury.gov.au
Telephone: +61 2 6263 3144