Big four name-and-shame audit quality reprieve criticised
Accounting bodies have softly lashed the corporate watchdog for axing its annual report card on big four accounting firms’ audit quality, cutting the program size, and ditching its chief accountant.
The concern comes amid growing disquiet about the dominance of the big four firms – KPMG, PwC, EY and Deloitte – in audit work, conflicts created by parallel consulting services, and calls for the quad to be broken up.
The big four have been put under the spotlight following the PwC tax scandal. Les Hewitt
Elinor Kasapidis, head of policy and advocacy at CPA Australia, said the peak body was “surprised and concerned by the reduction in scope of ASIC’s audit inspection program”.
“High-quality audits are vital to inspiring trust and confidence in capital markets,” Ms Kasapidis said. “We urge ASIC to provide a clear plan about how it will maintain its audit oversight role.”
Recent media attention prompted Chartered Accountants Australia and New Zealand assurance leader Amir Ghandar to call on the government to formally respond to a three-year Senate inquiry into the audit quality.
That inquiry was instrumental in pushing the Australian Securities and Investments Commission to make public its audit review findings.
“The inquiry examined audit regulation, quality, independence, the market and other related matters – and ultimately put forward clear bipartisan conclusions and 10 recommendations,” Mr Ghandar said.
Among those were recommendations to clearly define the difference between audit and non-audit services, and for ASIC to review its audit inspection methodology and develop a more sophisticated report card.
Three years after first making public its findings, however, The Australian Financial Review revealed in June ASIC had
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