Chapter 4Update on the regulation of auditing in Australia inquiry

Introduction

4.1This committee has reported regularly on audit quality in Australia. In 2019, the committee noted that the function of an audit is to provide an independent review of the financial statements and compliance plans of the company or financial entity and certify that they are a true and fair view of the business. By rigorously examining corporate accounts, an audit should expose false accounting and detect business risks and potentially serious problems, thereby presenting an accurate picture of business fundamentals and reducing the asymmetry of information between the management of a company and investors.[1]

4.2While audit quality has been of repeated domestic and international concern for more than a decade, the committee’s long-standing interest in the topic has largely emanated from concerns raised by the Australian Securities and Investments Commission (ASIC).

4.3On 1 August 2019, the Senate referred an inquiry into the regulation of auditing in Australia to this committee. The committee presented a substantive interim report to Parliament in February 2020 with ten recommendations.[2]

4.4This chapter discusses responses to and developments since the committee’s 2020 inquiry into the regulation of auditing in Australia, as well as further evidence received in the current inquiry on digital financial reporting.

4.5The chapter finishes with an important issue that arose in this inquiry in relation to the regulation of auditing: whether the law should be amended to give ASIC the power to also act against an audit firm rather than the current situation where it is only able to act against an individual auditor.

Action taken following the committee’s inquiry into the regulation of auditing in Australia

4.6The previous government did not respond to the committee’s 2020 report. On 5July 2024, the current government’s formal response to the ten recommendations in the 2020 interim report and the two recommendations in the dissenting report by the Australian Greens noted the recommendations but stated:

…given the passage of time since this report was tabled, a substantive Government response is no longer appropriate.[3]

4.7Meanwhile, ASIC, the Financial Reporting Council (FRC), and the Accounting Professional and Ethics Standards Board (APESB) have taken some action to progress recommendations 1, 2, 3, 5, 6 and 8.[4]

4.8Some of these actions involved:

the Australian Accounting Standards Board (AASB) reporting on audit fee remuneration;

ASIC requesting that the six largest firms encourage listed clients to align audit fee disclosures with the AASB report;

APESB increasing the independence requirements for fee disclosure and prohibitions of non-audit services in APES 110 with effect from 1January 2023;[5]

the FRC agreeing to make recommendations to the minister to pursue legislative change on disclosure of audit fees in directors’ reports[6] and the disclosure of auditor tenure;[7]

APESB amending APES 110 in December 2022[8] to prohibit audit partners from being incentivised to provide non-assurance services to audit clients of the firm;[9]

the Auditing and Assurance Standards Board (AUASB) consultations on the International Auditing and Assurance Standards Board updating the standards on fraud and going concern assessments,[10] and the FRC agreeing to make recommendations to the minister to pursue legislative change on these matters;[11]

the AUASB engaging with the Australian Securities Exchange Corporate Governance Council about whether Chief Executive Officer and Chief Financial Officer declarations should be enhanced;[12] and

EY agreeing to voluntarily adopt the committee’s recommendation to specifically confirm that no prohibited non-audit services have been provided.[13]

4.9In response to the committee’s recommendation that ASIC review the way it publicly reports the periodic findings of its audit inspection program, with a focus on the transparency and relative severity of identified audit deficiencies, ASIC consulted the six largest firms on a severity categorisation framework for audit deficiencies. It then issued Regulatory Guide 260 explaining its approach to communicating audit quality findings to directors and audit committees,[14] and completed its first integrated report covering both audit and financial reporting findings in October 2023.

4.10However, despite the committee recommending that the Australian Government introduce, by the end of the 2020–21 financial year, through appropriate legislation, a requirement that ASIC publish all future individual audit firm inspection reports on its website,[15] since June 2022, ASIC has not published the firms’ audit results.[16] ASIC also noted that there is no legislative requirement for it to undertake audit reviews.[17]

4.11Additionally, in May 2024, Treasury released a consultation paper on the regulation of the Big Four firms in Australia, which included questions on auditor independence,[18] auditor tenure,[19] governance,[20] and digital financial reporting.[21]

Evidence on the regulation of auditing to this inquiry

4.12Submissions to the current inquiry raised concerns that many of the issues identified in the committee’s 2021 interim report remain unresolved and their associated recommendations either partially addressed or not implemented at all, including:

poor audit quality and insufficient audit inspections;[22]

a need to publicly identify audit failures by firms;[23]

independence between audit and non-audit services and the need to improve auditor independence disclosures;[24]

insufficient incentives to appropriately limit auditor tenure;[25]

the need to improve fraud detection and assessments of going concern;[26]

internal control frameworks for financial reporting;[27] and

poor uptake of digital financial reporting.

4.13The Australian Shareholders’ Association (ASA) submission called for the committee’s ten recommendations to be enacted in 2024.[28]

4.14The Treasury’s May 2024 consultation paper indicated that recent events have called into question whether the regulatory framework for accounting, auditing and consulting firms appropriately balances policy objectives, such as supporting a competitive market, while fostering appropriate conduct in the provision of key services such as audit, insolvency and tax.[29]

4.15The Treasury consultation paper identified several issues as warranting consideration that were addressed by the committee’s 2020 recommendations, such as:

auditor independence and management of conflicts of interest;

audit quality and audit inspections;

the adequacy of professional standards;

resilience in the audit sector; and

the adequacy of standards setting and enforcement.[30]

4.16The Treasury consultation paper raised concerns that auditor firm tenure (as opposed to lead auditor rotation requirements) is unlimited, and that may compromise auditor objectivity and independence:

APES 110 and the Corporations Act both contain rotation requirements for key auditors. The lead auditor for a listed company client must rotate to another…[Registered Company Auditor] (who can be from the same audit partnership or…[Authorised Audit Company]) after 5 years. Tenure limits also apply to ‘review auditors’ (also known as engagement quality reviewers).

The auditor rotation requirements do not preclude the same firm from conducting the audits of the client on an ongoing basis, noting the average tenure of audit firms for the top 200 ASX-listed entities was 13.2 years in 2022 (and ranged from one year to 58 years).[31]

4.17Treasury suggested that the benefits and impacts of audit rotation merit consideration and noted that the European Union and the United Kingdom either require auditor firm rotation or impose a cap on audit tenure. Audit tenure in those jurisdictions varies from 10 to 20 years.[32]

4.18The FRC review of the oversight of audit quality in Australia made the following recommendation, which adds further weight to the issues identified in this section:

ASIC’s program of reviewing audit files only when financial reports are known or suspected to be misstated, should be augmented with a program that selects audit files on a risk and rotational basis for review, with the overall objective to review all auditors over an established time period.[33]

Digital financial reporting

4.19Evidence to the committee’s 2020 inquiry into the regulation of auditing in Australia indicated that the current format of financial reports presents substantial challenges for users, including regulators, standard-setters and professional bodies, in terms of being able to access information.

4.20Not only is extracting financial information time-consuming, expensive and error prone,[34] even after the data has been extracted, additional work and expense is required to get the data into a suitable form for analysis.[35]

4.21The committee noted that the voluntary approach to digital financial reporting taken in Australia for the past decade had not led to any significant use of digital financial reports.[36]

4.22Therefore, the committee recommended the government take appropriate action to make digital financial reporting standard practice because:

the evidence indicated considerable enthusiasm for the use of digital financial reporting; and

the benefits were likely to substantially outweigh the costs leading to:

increased transparency and improvements in financial statement quality;

lower information processing costs for users of financial statements;

increased forecast accuracy undertaken by analysts; and

improved information efficiency in capital markets.[37]

4.23Yet, despite widespread support, no significant action has been taken and the current government deemed a substantive response no longer appropriate due to the passage of time since the report was tabled.[38]

Treasury consultation

4.24The Treasury consultation paper noted that digital financial reporting would benefit users, companies and regulators and would overcome many of the problems of the current manual, paper-based approach.[39]

4.25Despite this, Treasury noted that Australia lags countries such as the United States, European Union, United Kingdom, Japan, South Korea, India, and China where some form of digital financial reporting has already been mandated.[40]

Evidence to the current inquiry

4.26The ASA observed that countries that have moved to digital financial reporting have experienced gains in speed, accuracy, transparency and efficiency,[41] and recommended legislation to make digital financial reporting standard practice in Australia.[42]

4.27The Governance Institute of Australia (GIA) noted some of its members already produce digital financial reports for other jurisdictions, and that the imminent move to mandatory climate-related financial disclosure may hasten the take up of digital financial reporting.[43]

4.28Chartered Accountants Australia and New Zealand (CAANZ) indicated its longstanding advocacy for legislation to mandate digital financial reporting for listed companies and public interest entities[44] in Australia, based on research and consultation with professionals, investors, businesses and regulators. CAANZ noted that despite ASIC making digital financial reporting available, it has not been used in Australia. CAANZ also suggested that the balance of benefits and costs is less clear for privately owned companies, not-for-profit entities and charities.[45]

4.29The Australia Institute supported making digital financial reporting mandatory in Australia and noted the benefits of speed, reliability and lower costs if data was available in a consistent, machine-readable format.[46]

4.30The Institute of Public Accountants (IPA) supported making digital financial reporting standard practice based on the benefits for audit quality.[47]

4.31ASIC noted that its submission to the committee’s 2020 regulation of auditing inquiry supported mandating digital financial reporting in Australia.[48] During hearings for the current inquiry, Mr Greg Yanco from ASIC stated that there is ‘a groundswell of support’ for digital financial reporting in Australia ‘to make financial reporting and auditing a lot more efficient and consistent’.[49]

4.32In response to questions from the committee, the ASA provided the information in Box 4.1 on the benefits of digital financial reporting. The ASA also provided information on some of the challenges to adoption in Australia.[50]

4.33Mr Tom Dickson, Assistant Secretary, Corporations Branch, Department of the Treasury, indicated that the potential administrative costs of mandating digital financial reporting would need to be considered, to ensure smaller businesses are not burdened with extra regulation and that the benefits outweigh the costs.[52]

How audit is currently regulated in Australia

4.34Significant differences exist between the regulation of auditing in Australia and the United States and the United Kingdom and the powers of the respective regulators.

4.35In Australia, ASIC may register an individual as a registered company auditor (RCA) if they meet the requirements. For a reporting entity to appoint a partnership as its auditor, at least one partner must be an RCA.[53] The partnership does not itself hold a separate audit authorisation.[54]

4.36ASIC submitted that it ‘does not have general jurisdiction’ over partnerships. Rather, it ‘has some jurisdiction over entities or individuals who are registered or licensed by ASIC to perform a particular role’.[55]

4.37As PwC submitted, ‘ASIC essentially regulates the individual, not the firm’.[56]

4.38Therefore, the legislative framework under which ASIC regulates audit in Australia differs significantly from the United States and United Kingdom where the Public Company Accounting Oversight Board (PCAOB) and the United Kingdom Financial Reporting Council (UK FRC) respectively have regulatory oversight of both audit firms and individual practitioners.[57]Interestingly, the Australian arms of the Big Four firms are registered with the PCAOB because the Australian arms also audit United States public companies. Therefore, the PCAOB may inspect a sample of these audits and the quality control systems every three years.[58]

4.39ASIC submitted that ‘international regulators with the power to register audit firms have taken action for poor culture and governance’.[59] For example:

The US Securities and Exchange Commission (SEC) fined EY US $US100 million ($144 million) after finding dozens of EY US audit personnel had cheated on the ethics portion of the US Certified Public Accountant exam and that the firm had misled regulators probing the conduct.[60]

4.40ASIC noted that it is not able to take similar action against an audit firm for poor culture and governance because:

…unlike the US, the Australian quality management standard is an auditing standard under the Corporations Act 2001 and ASIC can only act against a lead audit partner for non-compliance with an auditing standard in the conduct of an individual audit.[61]

4.41Further, as ASIC registers individuals as RCAs and not the audit firm itself, ASIC ‘has no ability to act against a firm or staff of a firm who are not RCAs for misconduct related to culture and governance (such as training matters)’.[62]

4.42Given the above legislative constraints on its powers, ASIC took the view that ‘law reform would be required to give ASIC the power to take action on audit firm compliance with quality management standards’.[63]

Committee view

4.43The committee view covers several matters including ASIC’s audit inspection reporting, auditor tenure and audit fees, a mandatory tendering regime, an internal controls framework for financial reporting, digital financial reporting, and the question of whether ASIC should have the power to act against an audit firm.

ASIC’s audit inspection reporting

4.44The issues underlying the committee’s recommendations in its 2020 report on auditing have been raised again in submissions to this current inquiry and the Treasury consultation paper. Given the ongoing nature of these concerns, the committee does not accept the government’s view that ‘a response is no longer appropriate given the passage of time’.

4.45The committee also observes that the government’s response could have set out the actions taken in response to some of the recommendations (1, 2, 3, 5, 6, and 8) made by ASIC, the APESB, the FRC, the AASB, AUASB and the Australian Institute of Company Directors (as summarised in Appendix 3).

4.46The committee notes that ASIC has developed a revised reporting framework that combines financial reporting and audit findings, including a summary of individual audit findings for all firms reviewed. The committee acknowledges the potential benefits of this integrated approach to financial report and audit inspections and the routine communication of audit findings to the directors of companies whose financial reports and audits have been inspected. The committee also welcomes ASIC’s new review (announced in May 2024) of auditors’ compliance with ethical and independence standards to support ASIC’s financial reporting and audit surveillance program.

4.47However, the committee considers that the new integrated approach to financial report and audit inspections in which ASIC only does risk-based and not random inspections needs to be revised. The committee notes that the FRC arrived at a similar conclusion in its 2023 review of the oversight of audit quality in Australia.

4.48Further, the reduced number of financial reports and audit files inspected is unsatisfactory. The committee considers that ASIC should review all audit files where conflicts of interest arise from the audit firms providing non-audit services to the same client.

4.49Recommendation 2 of the committee’s 2020 report proposed that the government legislate a requirement that ASIC publish all future individual audit firm inspection reports on its website. ASIC initially responded by publishing the individual firm audit inspection reports between June 2020 and June 2022. The committee is concerned that ASIC has subsequently discontinued publishing the audit inspections by firm name, undoing its earlier positive response to recommendations 1 and 2.

4.50While the committee understands ASIC’s need to prioritise its resources, it considers that reducing audit inspections is inappropriate when audit quality failures and other problems in the Big Four firms continue to be pervasive. Clearly, recommendations 1 and 2 have not been adequately implemented and the committee therefore considers that legislation is necessary to compel ASIC to name firms when publishing the audit inspection results.

4.51In its interim report, the committee recommended:

3 – standards for fee disclosure about audit and non-audit services and a list of non-audit services that audit firms are explicitly prohibited from providing to an audited entity.

5 – a safeguard that no audit partner can be incentivised, through remuneration advancement or any other means or practice, for selling non-audit services to an audited entity.

6 – standards to require audited entities to disclose auditor tenure in annual financial reports.

8 – a review of the reporting requirements for fraud and management’s assessment of going concern.

4.52The committee thanks the FRC and APESB for progressing recommendations 3, 5, 6 and 8. However, the government is yet to act on recommendations 6 and 8, and most other recommendations remain unimplemented. Given the problems in the Big Four audit firms identified in this and other recent inquiries and reviews, the committee considers its recommendations are still relevant. Therefore, the committee updates and resubmits those unimplemented recommendations to the government in this inquiry.

4.53The committee recommends that the Australian Securities and Investments Commission:

re-establish a program of random audit inspections;

supplement its existing risk-based approach by also reviewing audit files where conflicts of interest arise from the Big Four firms providing other services to their audit clients (noting that such conflicts should not occur from the time of implementation of operational separation); and

increase the level of resources that it devotes to financial report inspections and audit inspections until there is a significant improvement in audit quality.

4.54The committee recommends that the Australian Government implement a legislative requirement that the Australian Securities and Investments Commission publish all individual audit firm inspection reports.

4.55The committee recommends that the Australian Government implement the Financial Reporting Council recommendations to the Minister to pursue legislative change on disclosure of auditor tenure and audit fees in directors’ reports and going concern assessments in directors’ declarations.

4.56The committee recommends that the Corporations Act 2001 be amended to expand the auditor’s independence declaration to require the auditor to specifically confirm that no prohibited non-audit services have been provided.

4.57The committee recommends that the Corporations Act 2001 be amended to implement a mandatory tendering regime such that Public Interest Entities (including listed companies and the large multidisciplinary partnerships, such as the Big Four) required to have their financial reports audited under the Act must undertake a public tender process every ten years.

4.58The committee recommends that the Corporations Act 2001 be amended (following consultation with relevant stakeholders) such that entities required to have their financial reports audited must establish and maintain an internal controls framework for financial reporting, including requirements that:

management evaluate and annually report on the effectiveness of the entity’s internal control framework; and

the external auditor report on management’s assessment of the entity's internal control framework.

Digital financial reporting

4.59While the committee welcomes the government’s move to seek industry views on digital financial reporting in the Treasury consultation paper, it is disappointed that it has taken four years since the committee’s 2020 recommendation for Treasury to take that step. The committee strongly encourages Treasury to be proactive in moving policy, regulation and legislation forward to implement digital financial reporting.

4.60The committee reiterates the evidence that a failure to implement digital financial reporting has a raft of negative impacts including a lack of transparency, reduced productivity, an inability to apply data analytics and AI (Artificial Intelligence) tools, and greater audit risks including around the prevention of fraud.

4.61The committee considers it vital to substantially speed up progress on digital financial reporting with policy and, if necessary, regulatory or legislative changes, including making digital financial reporting mandatory.

4.62That said, the committee notes evidence from Chartered Accountants Australia and New Zealand that, while the benefits of digital financial reporting outweigh the costs for listed companies and other public interest entities, it is less clear whether this is the case for privately owned companies, not-for-profit entities and charities. To that end, the committee would support an approach to the introduction of digital financial reporting that ensures small businesses and entities are not unnecessarily burdened with extra regulation.

4.63The committee recommends that the Australian Government:

consider mandating digital financial reporting for listed companies and other public interest entities in Australia; and following such implementation and evaluation:

consider options for resolving barriers to implementing digital financial reporting for privately owned companies, not-for-profits and charities in Australia.

Legislative power to regulate audit firms

4.64Significant differences exist between the legislative framework under which ASIC regulates the audit industry in Australia compared to the legislative frameworks under which regulators operate in the United States and United Kingdom.

4.65In both the United States and United Kingdom, the regulator can act against an audit firm on a range of matters including poor culture and governance, and a failure to adhere to quality control and audit standards.

4.66By contrast, ASIC is unable to take such action in Australia because its current legislative remit is restricted to action against an individual auditor. ASIC has no general power to act against a partnership and no specific power to act against an audit firm.

4.67Given the instances of ongoing poor audit quality in Australia, as well as the evidence of a failure to adhere to ethical standards as demonstrated by audit personnel cheating on exams, this is an unsatisfactory legal situation.

4.68The committee considers it important that ASIC have the power to take regulatory action against audit firms as well as against an individual auditor.

4.69Therefore, the committee recommends that the government bring forward legislation to enable ASIC to take enforcement action against an audit firm, including for quality management standards.

4.70The committee recommends that the Australian Government legislate to enhance the Australian Security and Investments Commission’s power to take enforcement action against audit firms, not just individuals, including for quality management standards.

4.71The committee recommends that the Australian Government consider requiring audit firms, or the audit section of multidisciplinary firms, to incorporate.

Footnotes

[1]See Parliamentary Joint Committee on Corporations and Financial Services, Statutory Oversight of the Australian Securities and Investments Commission, the Takeovers Panel and the Corporations Legislation, Report No. 1 of the 45th Parliament, February 2019, p. 7.

[2]The committee’s final report was tabled in November 2020, reaffirming the recommendations made in the interim report and adding the committee’s concluding comments on the inquiry.

[3]Government response to the Joint Committee on Corporations and Financial Services’ interim report, Regulation of auditing in Australia, 5 July 2024; Government response to the Joint Committee on Corporations and Financial Services’ final report, Regulation of auditing in Australia, 5 July 2024.

[4]The committee’s recommendations from the interim report and the actions in response are summarised in Appendix 3.

[5]EY Australia, Submission 12.1, Appendix 1, p. 3; Mr Channa Wijesinghe, Chief Executive Officer, Accounting Professional and Ethical Standards Board, Committee Hansard, 1 March 2024, pp 22–23. See also Accounting Professional and Ethical Standards Board, Amendments to the Non-Assurance Services provisions of APES 110 Code of Ethics for Professional Accountants (including Independence Standards), December 2022.

[6]Financial Reporting Council, Minutes, 6 September 2023, Item 10.

[7]Financial Reporting Council, Minutes, 6 September 2023, Item 10.

[8]Accounting Professional and Ethical Standards Board, Amendments to the Non-Assurance Services provisions of APES 110 Code of Ethics for Professional Accountants (including Independence Standards), Section 600, December 2022.

[9]EY Australia, Submission 12.1, Appendix 1, p. 4.

[10]EY Australia, Submission 12.1, Appendix 1, p. 6.

[11]Financial Reporting Council, Minutes, 6 September 2023, Item 10.

[12]EY Australia, Submission 12.1, Appendix 1, p. 6.

[13]EY Australia, Submission 12.1, Appendix 1, p. 4.

[14]EY Australia, Submission 12.1, Appendix 1, p. 2.

[15]Parliamentary Joint Committee on Corporations and Financial Services, Regulation of Auditing in Australia, Interim Report, February 2020, p. ix.

[16]Australian Securities and Investments Commission, Annual financial reporting and audit surveillance report, Report 774, October 2023, p. 21; BDO Group Holdings Limited, Submission 38, p. 5.

[17]Australian Securities and Investments Commission response (received 8 April 2024) to Mr Doug Niven’s answers to questions on notice 083 and 084, 22 February 2024 (received 26 March 2024). See also Mr Greg Yanco, Executive Director, Regulation and Supervision, Australian Securities and Investments Commission, Committee Hansard, 3November 2023, pp.30–32.

[18]Department of the Treasury, Regulation of accounting, auditing and consulting firms in Australia, Consultation paper, April 2024, p. 25.

[19]Department of the Treasury, Regulation of accounting, auditing and consulting firms in Australia, Consultation paper, April 2024.

[20]Department of the Treasury, Regulation of accounting, auditing and consulting firms in Australia, Consultation paper, April 2024, pp 10–14.

[21]Department of the Treasury, Regulation of accounting, auditing and consulting firms in Australia, Consultation paper, April 2024, p. 38.

[22]Australian Shareholders’ Association, Submission 29, p. 1; BDO, Submission 38, p. 5.

[23]BDO Group Holdings Limited, Submission 38, p. 5; Australian Shareholders’ Association, Submission29, p. 1.

[24]See Submissions 1, 3, 8, 13, 25, 28, 29, 30, 32, 33, 38, 48, 68, 52, 56, 65, 66.

[25]Australian Shareholders’ Association, Submission 29, p. 2.

[26]Australian Shareholders’ Association, Submission 29, p. 2.

[27]Australia Securities and Investments Commission, Submission 49, p. 6; Australian Shareholders’ Association, Submission 29, p. 2.

[28]Australian Shareholders’ Association, Submission 29, p. 1.

[29]Department of the Treasury, Regulation of accounting, auditing and consulting firms in Australia, Consultation paper, April 2024, p. 7.

[30]Department of the Treasury, Regulation of accounting, auditing and consulting firms in Australia, Consultation paper, April 2024, pp. 9, 36.

[31]Department of the Treasury, Regulation of accounting, auditing and consulting firms in Australia, Consultation paper, April 2024, p. 22.

[32]Department of the Treasury, Regulation of accounting, auditing and consulting firms in Australia, Consultation paper, April 2024, p. 23.

[33]Financial Reporting Council, Oversight of audit quality in Australia—A review, November 2023, p. 6.

[34]Professor Peter Wells, Submission 7 to the committee’s 2020 inquiry into regulation of auditing in Australia, [pp 4–5].

[35]Australian Accounting Standards Board, Submission 32 to the committee’s 2020 inquiry into regulation of auditing in Australia, p. 13; see also Professor Peter Wells, Submission 7 to the committee’s 2020 inquiry into regulation of auditing in Australia , [p. 5].

[36]Parliamentary Joint Committee on Corporations and Financial Service, Regulation of auditing in Australia, Interim report, February 2020, pp 105–106.

[37]Parliamentary Joint Committee on Corporations and Financial Service, Regulation of auditing in Australia, Interim report, February 2020, p. 106; Final report, November 2020, p. 4.

[38]Government response to the Joint Committee on Corporations and Financial Services’ interim report, Regulation of auditing in Australia, 5 July 2024; Government response to the Joint Committee on Corporations and Financial Services’ final report, Regulation of auditing in Australia, 5 July 2024.

[39]Department of the Treasury, Regulation of accounting, auditing and consulting firms in Australia, Consultation paper, April 2024, p. 38.

[40]Department of the Treasury, Regulation of accounting, auditing and consulting firms in Australia, Consultation paper, April 2024, p. 38.

[41]Australian Shareholders’ Association, answers to questions on notice 28, 6 October 2023 (received 20December 2023).

[42]Australian Shareholders’ Association, Submission 29, p. 2.

[43]Governance Institute of Australia, answers to questions on notice 27, 6 October 2023, received 15December 2023.

[44]In Australia, Public Interest Entities (PIEs) include listed entities, banks, credit unions, insurance and reinsurance companies, pension funds and trusts, collective investments vehicles and mutual funds. International Ethics Standards Board for Accountants, Database of public interest entity (PIE) definitions by jurisdiction, 27 April 2023, https://www.ethicsboard.org/publications/database-public-interest-entity-pie-definitions-jurisdiction https://www.ethicsboard.org/publications/database-public-interest-entity-pie-definitions-jurisdiction(accessed 9 July 2024). PIEs are discussed further in Chapter 3.

[45]Chartered Accounts Australia and New Zealand, answers to questions on notice 9, 11 October 2023 (received 10 November 2023).

[46]The Australia Institute, answers to questions on notice 11, 6 October 2023 (received 14 November 2023).

[47]Institute of Public Accountants, answers to questions on notice 4, 11 October 2023 (received 31October 2023).

[48]Australian Securities and Investments Commission, Submission 49, p. 6.

[49]Mr Greg Yanco, Executive Director, Regulation and Supervision, Australian Securities and Investments Commission, Committee Hansard, 3 November 2023, p. 28.

[50]Australian Shareholders’ Association, answers to questions on notice 28, 6 October 2023 (received 20December 2023).

[51]Australian Shareholders’ Association, answers to questions on notice 28, 6 October 2023 (received 20December 2023).

[52]Mr Tom Dickson, Assistant Secretary, Corporations Branch, Department of the Treasury, Committee Hansard, 22 April 2024, pp 68–69.

[53]Department of the Treasury, Regulation of accounting, auditing and consulting firms in Australia, Consultation paper, April 2024, p. 15. See also Australian Securities and Investments Commission, Submission 49, p. 3.

[54]PwC, Submission 43, p. 10.

[55]Australian Securities and Investments Commission, Submission 49, p. 3.

[56]PwC, Submission 43, p. 10.

[57]PwC Australia, Submission 43, p. 10.

[58]PwC, Submission 43, p. 10; KPMG Australia, Submission 25, p. 21; Deloitte Touche Tohmatsu, Submission 40, p. 35; See also Public Company Accounting Oversight Board, Registered firms, https://pcaobus.org/oversight/registration/registered-firms (accessed 27 June 2024).

[59]Australian Securities and Investments Commission, Submission 49, p. 5.

[60]Australian Securities and Investments Commission, Submission 49, p. 5.

[61]Australian Securities and Investments Commission, Submission 49, p. 5.

[62]Australian Securities and Investments Commission, Submission 49, p. 5.

[63]Australian Securities and Investments Commission, Submission 49, pp 2–3.