GOOD corporate citizenship is becoming a fundamental requirement of Australian businesses with the Federal Government also turning its regulatory focus on the issue.
The Government has announced that it will review audit regulation and the wider corporate disclosure framework as the next phase in its Corporate Law Economic Reform Program.
Treasurer Peter Costello said Australia was well serviced by a highly skilled accounting profession.
“However it is timely, in view of widespread questioning over-seas of the quality of financial disclosure and supporting regulatory structures, for Australia to review its own regulatory frame-work in this area,” he said.
Key audit reforms to be considered include setting the rules and practices governing the audit process.
It also will take a view on the structures for overseeing of the profession, including disciplinary procedures, ethical rules, external quality assurance, educational requirements, professional development and competency standards.
However, the audit industry has been lukewarm in its response.
PricewaterhouseCoopers assurance leader Rob Ward believes the best way ahead involves a “proactive and enforce-able light touch approach, based not on detailed prescriptions and rules, but on the principles that under-pin all good corporate governance”.
“International investors are reluctant to provide capital where there is a lack of effective regulatory protection,” Mr Ward said. “On the other hand, onerous or inefficient regulatory regimes ultimately discourage investment and detract from the overall economic environment.”
