Date posted: 11/01/2021

ASIC audit inspection signals areas for improvement

ASIC’s recently released latest audit inspection report underscores where the audit profession needs to drive ongoing improvement says Chartered Accountants Australia and New Zealand (CA ANZ).

“This report pushes the profession to constantly strive for better performance and underscores where effort is already being invested,” said Amir Ghandar, Reporting & Assurance Leader at CA ANZ.

“Given the findings are mainly related to audits of 30 June 2019 and some 31 December 2019 year-ends, we will not yet be able to see the impacts of the recent regulatory developments and substantial effort from the profession.

“The impacts during the pandemic will also be an important factor in the next round of inspections.

“ASIC’s report provides valuable insights that the profession can take away and review the root causes underneath the findings.

“This is particularly timely as the economy looks to recover and reset from the pandemic with many of the broader audit quality measures and indicators set out in the report showing auditing overall continues to underpin confidence and integrity in the capital markets.”

ASIC’s report details the review of 179 key audit areas on a risk basis across 53 audit files between 30 June 2019 and 31 December 2019.

“Audit quality is about a process of continuous improvement, these results show further work is needed and where it is needed,” said Ghandar.

“ASIC’s program is risk-based rather than random, so the value is in ASIC really focusing on where the findings are likely to be rather than a representative sample.

“Impairment and asset values, in addition to revenue and the estimates and assumptions involved remain the most challenging areas.

“We continue to encourage the regulator to provide more graduated information on how it views the severity of issues identified, which we put forward in our submission to the recent parliamentary inquiry into audit regulation and has since been adopted among the inquiry’s recommendations.

“This will further add value and understanding around these important insights in future cycles.”

ASIC Audit Inspection Report

Read ASIC’s audit inspection report 

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