THE Federal Government’s long-awaited policy position on audit regulation has been released to mixed response from industry.
However, while most professional groups have indicated their initial reactions to the ninth instalment of the Government’s Corporate Law and Economic Law Reform Program, more detailed responses are expected within the next few weeks.
CPA Australia WA director Justin Walawski said his organisation was largely supportive of CLERP 9.
“A couple of things in it were very similar to proposals that we made in our accounting framework paper The Way Forward earlier this year,” he said.
“The proposal to have the Financial Reporting Council to have a standard setting and disciplinary role is something we support. We’re also supportive of the Australian Stock Exchange’s endeavours towards continuous disclosure.”
Mr Walawski said his organisation also supported tougher ASIC penalties.
“However, we don’t want to become too prescriptive with our legislation. We need to create something that goes to the spirit as well as the letter of the law,” he said.
Institute of Chartered Accountants in Australia regional councillor Derek Parkin said the institute supported the CLERP 9 proposals, however it did have some concerns.
“One reservation I have is regarding the formation of the Company Auditors and Liquidators Disciplinary Board,” he said.
“It is recommended that the bulk of the board be made up of non-practitioners.
“While it is worth having non-accountants on the board, having the bulk of the board made up of non-accountants, in what is a very technical area, is very strange.”
Mr Parkin said it was unlikely the recommendation that audit committees be mandatory for the top 500 listed companies would affect many WA companies.
“However, I’m sure there will be a strong emphasis on having financially literate people on that audit committee,” he said.
“It’s now a matter of seeing some of the detail.”
The Australian Institute of Company Directors has raised concerns over the wider powers being given to the Australian Securities and Investments Commission.
The 41 CLERP 9 proposals include making audit committees mandatory for Australia’s top 500 listed companies, making audit partner rotation compulsory after five years, protecting whistle-blowers and establishing a Share-holders and Investors Advisory Council.
Consultation with industry will close on November 22 and legislation is expected to be introduced in to parliament in early 2003.
