Doug Niven says ASIC’s move to slash audit quality oversight could be viewed as caving in to firms angry about negative publicity.
Already a subscriber?The Australian Securities and Investments Commission’s chief accountant for more than 25 years has slammed his former employer’s oversight of the big four audit firms and backed a new watchdog to regulate financial reports, sustainability reporting and audit quality.
Mr Niven also took a swipe at ASIC’s leadership, suggesting there was a risk they did not understand some of their regulatory responsibilities, such as audit, “which could result in suboptimal regulatory focus and outcomes”.Last year, the corporate regulator overhauled its audit quality surveillance program, pivoting to what it described as a “data-led, risk-based approach” that relied on issues in financial reports to identify audits for ASIC oversight.
“A problem does not cease to exist just because evidence of the extent of the problem is less apparent,” he said.Part of the reason for ASIC’s pivot is the long-term struggle to resource all its responsibilities within its existing budget allocation. Mr Niven suggested this supported the creation of a new watchdog.
It would also offer roles regarded as part of a career and offer greater certainty over tenure, he said, and not to be part of a much larger organisation dominated by other types of practitioners. Attracting people into the areas of auditing and oversight has been a long-term struggle for the industry.
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