Anomalies in the Oversight of Australian Auditors

Abstract

This commentary identifies and comments on anomalies in the oversight of Australian auditors and audit firms. Regulatory and professional oversight and inspection of Australian auditors and audit firms arise from a number of sources, highlighting its multi-faceted nature. This makes it impossible to identify a single body with ultimate responsibility for auditor oversight. Three recent Australian reviews commissioned by the Financial Reporting Council, together with an evaluation of the roles of the various regulatory and professional bodies, are used in this commentary as a platform from which to identify a number of significant anomalies in oversight processes. Major anomalies highlighted arise from the overlapping nature of the duties and functions of the various bodies and the variation in oversight across different categories of audit service providers. Policymakers should closely examine the issues raised in the paper if auditor oversight is to be undertaken in an effective and efficient manner.