Chartered Accountants Australia and New Zealand (CA ANZ) has outlined a five-point reform plan to strengthen accountability, oversight and audit quality across Australia's auditing profession, while ensuring reforms remain targeted, proportionate and carefully scoped so smaller practices and entities are not caught by requirements designed for the largest firms.
In its submission to Treasury's consultation on the regulation of accounting, auditing and consulting firms, CA ANZ has proposed practical reforms to close longstanding regulatory gaps, strengthen oversight and governance, and better protect people who speak up.
CA ANZ Chief Executive Officer Ainslie van Onselen said high-quality audit was fundamental to confidence in the economy.
"The accounting profession plays a critical role in Australia's economy and society, helping to build trust in the information relied on by businesses, investors, governments and the wider community," Ms van Onselen said.
"Our focus is on reforms that strengthen confidence, accountability and audit quality while recognising the important contribution the profession makes to Australia's economic success."
Five-point reform plan
Damian Ogden, CA ANZ Group Executive Advocacy, Public and Government Affairs said CA ANZ's submission focuses on five practical reforms designed to improve audit quality, governance and public confidence.
"These reforms are designed to address genuine regulatory gaps and support better outcomes for investors, businesses and the wider community."
- License firms where audit quality matters most: require public interest entities to obtain audit services only from firms licensed by ASIC, giving ASIC firm-level oversight of quality management, ethics, independence and governance.
- Set a governance code for large audit firms: introduce an enforceable Australian audit firm governance code reinforcing audit quality, independence, ethical culture, transparency and accountability for key decision makers.
- Give ASIC the full regulatory toolkit: equip ASIC with proportionate civil penalties, administrative powers and remediation tools, with due process and fairness preserved.
- Protect people who speak up: strengthen whistleblower protections so people in large professional services structures are not excluded because of the structure they work in.
- Keep reform targeted and proportionate: scope reforms to entities of clear public interest, such as listed companies (disclosing entities) and registrable superannuation entities.
"Careful scoping was essential so that reforms focus on firms and entities of clear public interest, without imposing disproportionate cost on smaller practices or the businesses and community organisations they serve," Mr Ogden said.
The submission also proposes giving the Australian Securities and Investments Commission (ASIC) appropriate jurisdiction to regulate audit firms at the firm level, not only individual auditors.
"ASIC can hold individual auditors to account, but not the firms they work in, even though that is where the decisions on quality management, independence, resourcing and culture are actually made," Mr Ogden said.
"Closing that gap is one of the most important changes in this package, because it addresses where accountability and responsibility actually sit."
Maintaining trust in the profession
Ms van Onselen said the goal throughout was better outcomes, not more process.
"Reform should focus on accountability, governance and audit quality, not on forcing firms into structures that impose cost and disruption without a clear benefit," Ms van Onselen said.
"Breaking up multidisciplinary firms could strip audit teams of the specialist skills that complex audits rely on, from technology and cyber security to tax, valuation, actuarial and sustainability expertise.
"That could actually reduce audit quality, not improve it, and it would do nothing to fix the governance and accountability issues that actually matter.
"Chartered Accountants and auditors are not simply commercial service providers. They belong to one of the world's most respected professions, combining deep technical expertise with a commitment to the public interest.
"Professional bodies like CA ANZ have a vital role to play, supporting that commitment by setting expectations, upholding standards and promoting the values that underpin public trust.
"That commitment needs to be backed by strong, targeted regulation where it matters most: the high-stakes audits of listed and very large companies," Ms van Onselen said.
