HA3032 Auditing ASSIGNMENT XXXXXXXXXXYou are required to read the following statement issued by...

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HA3032 Auditing      ASSIGNMENT XXXXXXXXXXYou are required to read the following statement issued by ICAA (Institute of Chartered Accountants in Australia and provide an essay of between 1,000-1,500 words (being the minimum and maximum). It should be properly referenced and must be primarily of your own work.  Press release: Legislation to improve the quality and transparency of the auditing process has been introduced into the House of Representatives this week by Parliamentary Secretary to the Treasurer David Bradbury. The Corporations Legislation Amendment (Audit Enhancement) Bill 2012 is the result of a Treasury review of audit quality and extensive stakeholder consultation during 2011 on measures that are designed to enhance audit quality and ensure that Australia's regulatory framework remains in line with international best practice.  Measures in the Bill include:  • Requiring audit firms to publish an annual transparency report if they conduct audits of 10 or more significant entities  • Empowering ASIC to issue an audit deficiency report in relation to an individual audit firm if it identifies an audit deficiency in the auditor's quality control system or the conduct of an audit that may be detrimental to the overall quality of the audit  • Removing duplication of ASIC and Financial Reporting Council (FRC) audit inspection responsibilities so that ASIC continues its audit inspection program and the FRC focuses on providing strategic policy advice and reports on the quality of Australian audits.  • Allowing ASIC to communicate directly with an audited body.  • Allowing a two-year extension to the five-year auditor rotation requirement where it will not give rise to a conflict of interest and will prevent the loss of knowledge and experience where rotation could undermine the quality of the audit.  ICAA report: Reforms to enhance Audit Quality  Available from: www.chartered accountants.co.au/industry-Topics/Audit-and-Assurance      Other sources:  AUASB website  CPAA website XXXXXXXXXXRequired:  Discuss the following in your essay (approximately 1,000 words and no more than 1,500 please):  What each of the above actually refers to and what it means.  What is your view, giving a rational explanation to your view (you may use other sources to support your view, properly referencing). Why do you think that these measures were introduced?  The due date for this assignment will be week 5 (must be lodged by 5.00pm on the Friday). Please note: a soft copy must be lodged on Safeassign by the due date and a hard copy provided to your lecturer.

David · Accepted Answer

The ICAA (Institute of Chartered Accountants of Australia) recently came up with and issued 
a statement relating to a press release dated March 2, 2012 regarding a legislation introduced 
in to the House of Representatives by the Parliamentary Secretary. The abovementioned 
legislation relates to the reforms proposed to enhance and improve audit quality in Australia, 
and is called the Corporations Legislation Amendment (Audit Enhancement) Bill 2012. The 
legislation proposes certain measures with such an aim in its perspective. The main rationale 
behind these reforms is to bring about transparency in the audit process, enhance and improve 
the quality of audit in Australia and to bring about and maintain the standards of the auditing 
profession in accordance with the international standards of best price. It is also accepted that 
such changes and reforms in the quality of audit work would help to invoke the confidence of 
the various stakeholders and investors in the financial reports of the companies being 
invested in and thus, benefiting the entire capital market. 
The first of these measures requires audit firms who conduct audits of 10 or more significant 
entities to publish an annual transparency report. This measure relates to big audit firms who 
carry out the audit if at least 10 significant entities. These significant entities include all 
Australian public listed companies, certain registered schemes which are registered, insurance 
companies and various ADIs or authorised deposit-taking institutions. The auditors who carry 
out such audits are required under the proposed legislation to publish a transparency report on 
their website containing the prescribed factual information in a prescribed format. The audit 
firms will be required to publish such information as relates to their governance, structure, 
details regarding amount and methods of fees charged, issues of auditor independence, 
information about the quality control system of the audit and other such related issues. The 
reason behind this measure is to make such audit firms, who carry out large audits, as 
transparent in their audit practices, formation and structure as possible. It is anticipated that 
such a measure will assist in making the functioning of large audit firms and their audit 
quality control system very crystal clear and devoid of any ambiguity of any kind. Such 
transparency, will definitely, bring the quality of audit at par with the standards in countries 
such as U.S. and U.K. and help to boost the confidence of the investor in the financial reports 
audited by such firms.

HA3032 Auditing ASSIGNMENT XXXXXXXXXXYou are required to read the following statement issued by ICAA (Institute of Chartered Accountants in Australia and provide an essay of between 1,000-1,500 words...

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