Financial Reporting Council calls for greater imagination to fix auditing gaps

A range of issues have emerged from the newly released report by the Financial Reporting Council (FRC), which deals with the state of audit quality in Australia. The most important of them is a greater need for imagination when designing regulatory solutions for auditing.

The FRC chronicles various regulatory gaps — not every auditor is overseen by an enforcement body — and it surveys the global scene to point out where Australia’s regime sits about arguably similar systems.

A decline in the monitoring of audit working papers by corporate regulator the Australian Securities and Investments Commission (ASIC) is noted, as is the need for professional accounting bodies to do more work with their practice quality reviews.