Australia Directs ASIC to Improve Audit Regulation

Last week, the Australian government directed the Australian Securities & Investments Commission (ASIC) to improve the regulation of accounting and audit firms following a series of governance failures, as reported by Reuters.

ASIC has been tasked with “enhancing the accountability, transparency and oversight of the audit sector.” Specific regulatory steps were not detailed, but earlier proposals included bringing the firms under ASIC’s direct purview, giving the regulator more powers, and increasing penalties for misconduct.

ASIC has separately announced an investigation into how the big four accounting firms handle internal complaints, alongside its probe into KPMG amid its ongoing audit leaks scandal. And, as we covered earlier this month, the government is also considering structural reforms to the accounting profession, including the possible separation of firms’ audit and consulting arms.

In 2023, Starling published “Renal Failure: A Crisis in Audit Culture?,” a Deeper Dive report into global concerns surrounding audit quality and professional conduct. Therein, we discuss the efforts of regulators to reform audit quality and governance.