HA3032 Auditing

Trimester 2 / 2012

ASSIGNMENT 1

You are required to read the following statement
issued by ICAA (Institute of Chartered Accountants in Australia and provide an essay of
between 1,000-1,500 words (being the minimum and maximum). It should be
properly referenced and must be primarily of your own work.

Press release:Legislation to improve the
quality and transparency of the auditing process has been introduced into the
House of Representatives this week by Parliamentary Secretary to the Treasurer
David Bradbury. The Corporations Legislation Amendment (Audit Enhancement)
Bill 2012is the result of a Treasury review of audit quality and extensive
stakeholder consultation during 2011 on measures that are designed to enhance
audit quality and ensure that Australia’s
regulatory framework remains in line with international best practice.

Measures
in the Bill include:

• Requiring
  audit firms to publish an annual transparency report if they conduct audits
  of 10 or more significant entities

• Empowering
  ASIC to issue an audit deficiency report in relation to an individual
  audit firm if it identifies an audit deficiency in the auditor’s quality
  control system or the conduct of an audit that may be detrimental to the
  overall quality of the audit
• Removing
  duplication of ASIC and Financial Reporting Council (FRC) audit inspection
  responsibilities so that ASIC continues its audit inspection program and
  the FRC focuses on providing strategic policy advice and reports on the
  quality of Australian audits.
• Allowing
  ASIC to communicate directly with an audited body.
• Allowing
  a two-year extension to the five-year auditor rotation requirement where
  it will not give rise to a conflict of interest and will prevent the loss
  of knowledge and experience where rotation could undermine the quality of
  the audit.

ICAA report: Reforms to enhance Audit Quality
Available
from: www.chartered
accountants.co.au/industry-Topics/Audit-and-Assurance

Other sources:

AUASB website

CPAA website

Required:

Discuss the following in your essay (approximately 1,000 words and no
more than 1,500 please):

What each of the above actually refers to and what it means.

What is your view, giving a rational explanation to your view (you may
use other sources to support your view, properly referencing). Why do you think
that these measures were introduced?

The due date for this assignment will be week 5 (must be lodged by
5.00pm on the Friday). Please note: a soft copy must be lodged on Safeassign by
the due date and a hard copy provided to your lecturer.