ASIC Reminds Auditors of their Obligations

In a letter to Australian registered company auditors published this week, the Australian Securities and Investments Commission (ASIC) sets out its current audit-related work and reminds auditors of their legal, professional, and ethical obligations.

The letter, signed by ASIC Commissioner Kate O’Rourke, opens by acknowledging that there is “significant focus on the conduct of auditors and audit firms and concerns about trust and confidence in the profession.” O’Rourke further expresses ASIC’s concern regarding “issues that have been raised about auditors who have not complied with the law and professional and ethical standards to act independently and ethically.”

ASIC’s surveillance program for 2026-27 will select audit files for both randomly and through a risk-based process. The regulator is also examining internal complaints received by large audit firms about their audit practice. Auditor misconduct remains a designated enforcement priority, and ASIC has opened investigations in relation to recently raised allegations. Where sufficient evidence of non-compliance is identified, the regulator may seek cancellation or suspension of an auditor’s registration, issue an infringement notice, or pursue civil action.

The letter goes on to restate the core obligations that apply to registered company auditors: maintaining independence under the Corporations Act, providing accurate and timely information to ASIC, reporting contraventions and attempts to interfere with the proper conduct of an audit, and acting ethically in accordance with the APES 110 Code of Ethics. ASIC will also begin holding twice-yearly meetings open to all registered company auditors to discuss its priorities and findings and to hear about emerging issues, the letter explains.

“Investors, consumers and other stakeholders in our financial system rely on quality financial reports to make informed decisions,” O’Rourke writes. “Auditors play a critical role in giving investors and other users of those reports confidence that they have a clear view of a company’s position and performance. This is vital for maintaining trust and confidence in the financial system.”