CPA Australia has announced that the Federal Treasury’s newly released Options Paper on audit and accounting company regulation is an “important opportunity” to reinforce trust in the integrity of Australia’s financial markets.
The consultation document outlines a series of reform options intended to strengthen accountability, governance, audit quality and regulatory oversight across the audit profession.
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CPA Australia audit and assurance lead Tiffany Tan argued that any eventual measures should be closely focused on real gaps in supervision, while maintaining competition and choice in the audit market and ensuring reforms are proportionate.
Tan said: “Treasury’s Options Paper is an important contribution to the discussion about how we strengthen public confidence in the integrity of Australia’s financial markets.
“The audit profession plays a critical public-interest role. Independent, high-quality audits underpin confidence in financial reporting, support informed investment decisions and help maintain trust in Australia’s capital markets.”
Among the proposals canvassed are options that may reshape the structure and regulation of audit and accounting practices.
These include potential structural separation of companies, limiting audit engagements for reporting entities to “an authorised audit company” and reducing the maximum number of partners allowed in a practice.
Tan said regulators should concentrate their efforts on areas that most directly affect audit quality, auditor independence and public confidence.
Tan said: “We support a targeted, risk-based approach that addresses genuine gaps in oversight without imposing unnecessary burdens across the profession.
“The greatest regulatory attention should be directed to areas with the highest public-interest impact, particularly where questions around accountability, conflicts of interest and firm-level governance arise.”
She also stressed that any policy changes must take into account the varied nature of the audit market, including distinctions between large multidisciplinary companies and smaller practices that focus on clients in the non‑corporate sector.
“The Treasury paper sets out a range of reforms options that require careful consideration,” Tan added.
“We observe that comparable jurisdictions have generally favoured more targeted measures such as operational separation, non-audit service restrictions, stronger oversight and enforcement.”
CPA Australia recently supported the federal government’s trust tax and capital gains tax updates.
