ASIC flying blind on auditing, accounting
The Australian Securities and Investments Commission (ASIC) has confirmed the degree to which it is flying blind with respect to its oversight of company auditors.
At the same time as the Companies Auditors Disciplinary Board (CADB) has confirmed that it has not received a single auditor disciplinary referral from ASIC in the past decade.
Giving evidence before the Parliamentary Joint Committee on Corporations and Financial Services, CADB chair, Maria McCrossin said that she had been a member of the board since 2013 and, in that time, no ASIC referrals had been received.
The committee chair, Deborah O’Neill said that she had to “express some shock from the information we have been receiving over time that you have not had a single referral from ASIC to you for disciplinary consideration”.
Later, ASIC officials told the Parliamentary Committee that while the regulator had visibility with respect to registered auditors of major audit companies, it had no visibility with respect to audit staff because it did not necessarily have the names of audit staff.
“We can review their work but don’t supervise their staff,” ASIC director, Markets, Greg Yanco told the committee.
Further, he said that because ASIC did not know the names of audit staff it could not therefore cross-match those names with respect to seeking to determine whether they were authorised representatives.
The committee had earlier been told that there were hundreds of registered auditors working for companies such as PWC, KPMG, Deloitte and EY and thousands of audit staff.
O’Neill said that it appeared there were “a lot of blind spots in terms of what I might expect”.
“ASIC is the agency which oversees audit and you just described a system where you have no significant purchase over audit,” she said. “So, if you’re not doing it who is doing the proper oversight over audit?”
O’Neill said that what she wanted was clarity on what the community expectations was of the profession of accounting and auditing and the interchangeability of the terms …. And the reach that ASIC does not have into a sector that everybody assumes you are oversighting”.
If I ran my business like ASIC ran theirs, I’d be in jail.
I have paraplanners that write my plans: ASIC don’t know who they are, and don’t need to. My name is on the plan.
Which begs the following question: if the disciplinary board has not has a single complaint from ASIC, how many complaints have they had in the last decade, and from who? If the only source of complaints that they are allowed to accept are from ASIC, what on earth have they been doing for 10 years?
Maybe ASIC’s audit team could talk to their Financial Adviser team, who could tell them things they could do, such as surveillance activity, shadow shopping, file reviews. Then they could do reports from time to time and investigate particular issues. Maybe when they see things go wrong, like financial statements being changed or companies suddenly going into administration, they could investigate what the auditors did.
I think that if they check their powers, they will see that they can issue notices to demand materials. I guess that this flows through to the ASIC Funding Levy. Lucky auditors. No wonder ASIC spends more on the financial advice sector than any other sector, as it seems to be the only sector that they pay a close interest in. Maybe they might like to ask themselves why, and what should change to get the balance right?
The headline on the article only needs the first three words.
It’s not just accounting and auditing.
Quick ASIC best ban a few more Advisers for FDS spelling mistakes.
As for anything or anyone else under ASICs supervision, we don’t do anything so carry on as you choose.
This highlights the focus ASIC has on financial advisers, whilst neglecting other segments of the markets. It’s time the pendulum swung, however the moral hazard is ASIC retaining the status quo so that they can bill advisers in the form of their levy and maintain their self interests (their jobs).
ASIC is too busy persecuting honest, licensed, financial advisers to do anything else. They have completely neglected what they are supposed to be doing – protecting consumers.
Far easier targets around. Let’s just forget about the Billion dollars in scams happening at the moment because we’ve got to cull those 15,000 advisers directing money away from Union Super funds and calling out incompetence in this industry. ASIC are just too busy sending Advisers to jail, for handing out Fee Disclosure Statements to clients sitting in front of them, a couple of days prior to the Anniversary date.