CPA Australia welcomes ANAO report to enhance audit oversight

• CPA Australia commends ASIC for actions to strengthen oversight
  
• Report is a call to collaborate and improve, not cause for alarm
  
• Reforms must deliver practical benefits for audit quality and market integrity
  

Australia’s largest accounting body, CPA Australia, has expressed support for the Australian National Audit Office’s (ANAO) performance audit of ASIC’s regulation of registered company auditors (RCAs), which concluded ASIC’s oversight is “partly effective”. 

CPA Australia’s Audit and Assurance Lead, Tiffany Tan, said that while governance structures exist, the absence of performance metrics limits transparency and accountability.

“Registered company auditors play a critical role in safeguarding Australia’s financial markets. The ANAO report highlights key areas for improvement, and we commend ASIC for taking early steps to implement several recommendations,” Ms Tan said. 

“Strengthening audit regulation is an important issue for the profession. We welcome ASIC’s early initiatives and reiterate our commitment to a collective solution that enhances audit quality and market integrity.

“The report is an opportunity to reflect, improve and strengthen trust in the system that is so crucial to upholding the integrity of our financial markets.” 

The ANAO report highlighted several areas for improvement:

• Performance Measurement: ANAO highlighted the need for clearer metrics to assess whether ASIC’s interventions improve audit quality. CPA Australia recommends clearer surveillance reporting, including a tiered classification system (observation, deficiency, significant issue) and contextual analysis to help firms understand practical implications and drive better outcomes.
• Follow-through: Improving remediation processes will ensure identified deficiencies are addressed promptly. CPA Australia supports ASIC’s commitments to strengthening this aspect of its program. 
• Enforcement Focus: ANAO note that most enforcement actions relate to administrative breaches rather than audit quality. CPA Australia encourages continued dialogue to align enforcement priorities with audit quality outcomes.
• Stakeholder Engagement: Greater transparency and collaboration with the profession will help achieve shared goals. CPA Australia is committed to supporting this engagement.
• Ministerial Expectations: Updating ASIC’s statement of expectations will ensure regulatory priorities reflect emerging risks, including sustainability reporting.

CPA Australia is pleased to see that ASIC’s 2024/25 surveillance program includes an increase in audit file reviews, and the use of random selection. We welcome this initiative as a positive step toward strengthening audit oversight.

“CPA Australia stands ready to work with ASIC and other stakeholders to implement these changes and strengthen trust in Australia’s financial reporting framework,” said Ms Tan.

Media contact

Simon Downes, External Affairs Lead
[email protected]
+61 0401 461 503