“Auditors play a critical role in the trust and confidence in our businesses, capital markets and public institutions and literally enable the economy to function,” says CA ANZ Audit Leader Amir Ghandar FCA.

“It is clear the public, business and investors have confidence in auditors, and we have a high quality of audited financial reporting in Australia, however of course continuous improvement and a rigorous focus on the risks is vital to maintaining this.”

“The report yields rich insights on ASIC’s views, focusing on the most difficult areas in financial reporting and audit, such as estimates and judgements, and the program is a crucial part of ASIC’s regulatory toolbox.”

“As ASIC point out in the report however, the small risk-based sample used is not intended to provide statistics that are generalisable or comparable across the population of audits in Australia.”

The report illustrates the challenges in particular related to asset valuations and impairment along with revenue recognition and receivables. Case studies and further detail are provided in ASIC’s report on these and other key areas of findings.

CA ANZ’s fourth annual retail investor confidence survey in 2022 showed auditors remain the most trusted when it comes to investor protection, closely followed by government regulators, financial analysts and the stock exchange and around 9 of 10 investors are either confident or highly confident in Australian listed company financial statements.

“The profession is committed to quality and continuous improvement, we’ve seen major investments in audit quality over the past decade and a whole new set of quality management standards coming in this year alongside strengthened independence requirements. We will be working hard to make sure the findings in this report are disseminated throughout the profession,” concluded Mr Ghandar.