The Australian Securities and Investments Commission (ASIC) is set to publish part of its findings from its review of the ‘Big Four’ audit and consulting practices before year-end, after a wave of industry scandals, reported Bloomberg.
The regulator began monitoring the companies, including Deloitte, EY and PricewaterhouseCoopers, after allegations emerged earlier this year that KPMG Australia had used confidential client information to secure new corporate work.
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The news agency cited excerpts of a speech by ASIC chair Sarah Court, which said the monitoring focused on “issues that have been raised in their internal complaints, including by whistleblowers.
“That surveillance is ongoing, and we intend to share some high-level findings before the end of the year,” noted Court.
In the most recent development related to the long-running controversy, ANZ this month removed KPMG Australia as its external auditor, bringing a 57-year relationship to an end.
Macquarie Group withdrew its decision to appoint KPMG as its auditor in August.
KPMG has also lost Insurance Australia Group and property group Lendlease as clients.
The regulator has also initiated several inquiries and formal investigations linked to the allegations, as ASIC increases its scrutiny of the sector, Court added.
She said: “The relationship between a business and its auditor is one of immense trust – a business must open itself up and share some of its more important and sensitive information. The alleged behaviours have broken that trust.”
She pointed to the limits on ASIC’s supervisory role, arguing that the existing regulatory system “focuses on individual auditors and individual engagements and is, in our view, inadequate for regulating the large multi-disciplinary firms that play such an integral role in Australian markets”.
According to Court, ASIC would welcome a Treasury consultation on possible reforms, including proposals to strengthen enforcement and disciplinary measures.
“We have been engaging regularly with Treasury on these matters and we are looking forward to seeing the outcomes of this consultation,” she added.
