Australia's Accounting Professional & Ethical Standards Board (APESB) has called for the consulting arms of the Big Four firms — Deloitte, EY, KPMG, and PwC — to face regulation just as their audit and tax divisions do, as reported by the Australian Financial Review.
In its response to a Parliamentary joint inquiry into the structure of the Big Four, the APESB lamented that they operate in a legal grey area, not fully covered by federal corporate laws. This gap leaves the Australian Securities and Investments Commission (ASIC) to regulate only a small portion of their services.
The APESB also criticized ASIC's recent overhaul of its audit quality surveillance program, which reduced the number of audit reviews and eliminated the annual report card that detailed negative findings. The Board fears this change could undermine audit quality in the long term.
The Board emphasized the importance of a robust surveillance program to maintain market integrity. In FY23, ASIC conducted only 15 audit reviews, significantly fewer than in previous years and far fewer than regulators in Britain and Canada. The APESB urged ASIC to review more audit files annually to safeguard the quality and integrity of Australia's audit services.
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