{"id":23561,"date":"2021-05-19T08:37:22","date_gmt":"2021-05-18T22:37:22","guid":{"rendered":"https:\/\/ngm.com.au\/?page_id=23561"},"modified":"2021-11-11T12:42:18","modified_gmt":"2021-11-11T01:42:18","slug":"asics-audit-inspection-program-are-you-a-target","status":"publish","type":"page","link":"https:\/\/ngm.com.au\/fr\/asic-audit-inspection-program\/","title":{"rendered":"ASIC\u2019s audit inspection program: Are you a target?"},"content":{"rendered":"<div class=\"wpb-content-wrapper\"><div class=\"nolwrap\"><p>[vc_row][vc_column][vc_empty_space][\/vc_column][\/vc_row][vc_row][vc_column][vc_single_image image=\u00a0\u00bb23562&Prime; img_size=\u00a0\u00bbmedium\u00a0\u00bb alignment=\u00a0\u00bbcenter\u00a0\u00bb][\/vc_column][\/vc_row][vc_row][vc_column][vc_empty_space][\/vc_column][\/vc_row][vc_row][vc_column][vc_column_text]The Australian Securities and Investments Commission (ASIC) commenced an <a href=\"https:\/\/asic.gov.au\/regulatory-resources\/financial-reporting-and-audit\/auditors\/audit-inspection-and-surveillance-programs\/\" target=\"_blank\" rel=\"noopener noreferrer\">audit inspection program<\/a> in 2004, to assist in fulfilling its financial reporting and auditing requirements of the <em>Corporations Act<\/em>.<\/p>\n<p>ASIC&rsquo;s audit inspection program reviews compliance with <a href=\"https:\/\/ngm.com.au\/auditor-independence-and-audit-quality\/\" target=\"_blank\" rel=\"noopener noreferrer\">audit quality and auditor independence<\/a> requirements.<\/p>\n<p>&nbsp;<\/p>\n<h2 id=\"which-firms-will-be-audited\"><strong>Which firms will be audited?<\/strong><\/h2>\n<p>The inspection program covers all firms including smaller firms, with an emphasis on firms auditing publicly listed or public interest entities.<\/p>\n<p>&nbsp;<\/p>\n<h2 id=\"the-audit-inspection-process\"><strong>The audit inspection process<\/strong><\/h2>\n<p>Key steps in the audit inspection process include:<\/p>\n<p>&nbsp;<\/p>\n<h3 id=\"planning\"><strong>Planning<\/strong><\/h3>\n<p>The planning process consists of ASIC:<\/p>\n<ul>\n<li>Meeting with the firm to discuss the inspection process.<\/li>\n<li>Issuing notices to the firm requesting information relating to audit quality and auditor independence.<\/li>\n<li>Gaining an understanding of the structure and governance arrangements of the audit firm and information about its key clients.<\/li>\n<\/ul>\n<p>&nbsp;<\/p>\n<h3 id=\"performance\"><strong>Performance<\/strong><\/h3>\n<p>The performance process consists of ASIC:<\/p>\n<ul>\n<li>Reviewing the notice material produced by the audit firm.<\/li>\n<li>Selecting a number of the firm&rsquo;s audit clients based on risk.<\/li>\n<li>Conducting an on-site inspection to validate audit quality and auditor independence. This involves reviewing the audit work papers, conducting interviews with staff and key audit firm personnel.<\/li>\n<\/ul>\n<p>&nbsp;<\/p>\n<h3 id=\"reporting\"><strong>Reporting<\/strong><\/h3>\n<p>ASIC prepares a private and confidential report for the inspected firm, which includes the firm\u2019s responses to ASIC\u2019s findings. The results may also be published in a public report, which anonymises audit firms and clients.<\/p>\n<p>&nbsp;<\/p>\n<h2 id=\"audit-inspections-of-smaller-f\"><strong>Audit inspections of smaller firms<\/strong><\/h2>\n<p>The audit inspection procedure outlined above applies to larger firms. For smaller firms, a more limited approach is taken consisting of ASIC reviewing one audit file and discussing the findings with the audit firm. These reviews are mainly conducted at ASIC\u2019s offices.<\/p>\n<p>&nbsp;<\/p>\n<h2 id=\"what-happens-after-the-inspect\"><strong>What happens after the inspection?<\/strong><\/h2>\n<p>ASIC raises potential issues with the auditor and audit firm and considers whether further <a href=\"https:\/\/ngm.com.au\/asic-penalties-and-enforcement-corporate-financial-crime\/\" target=\"_blank\" rel=\"noopener noreferrer\">regulatory action<\/a> is necessary for instances of non-compliance.<\/p>\n<p>&nbsp;<\/p>\n<h2 id=\"international-cooperation-of-a\"><strong>International cooperation of audit regulators<\/strong><\/h2>\n<p>With the globalisation of business, it is increasingly required for audits to be conducted across borders. ASIC cooperates with international audit regulators to share information, conduct joint audit inspections, and engage in other forms of cooperation as required. To date, ASIC has such arrangements in place with:<\/p>\n<ul>\n<li>The Public Company Accounting Oversight Board (PCAOB) of the United States.<\/li>\n<li>The Canadian Public Accountability Board (CPAB).<\/li>\n<li>The European Commission and European Union audit regulators.<\/li>\n<li>The Commission de Surveillance du Secteur Financier of Luxembourg (the CSSF).<\/li>\n<\/ul>\n<p>&nbsp;<\/p>\n<p><strong>Conclusion<\/strong><\/p>\n<p>ASIC is increasingly focusing on ensuring audit quality and auditor independence, as evidenced by its audit inspection program and cooperation with international audit regulators. All audit firms including smaller firms fall within the scope of the program. The emphasis however is on larger firms auditing publicly listed or public interest entities.[\/vc_column_text][vc_empty_space][\/vc_column][\/vc_row][vc_row][vc_column][vc_raw_html]JTVCc29jaWFsLXNoYXJlJTVE[\/vc_raw_html][\/vc_column][\/vc_row][vc_row][vc_column][vc_empty_space][vc_column_text]<em>Nyman Gibson Miralis provides expert advice and representation in all aspects of corporate criminal law.<\/em><\/p>\n<p><a href=\"https:\/\/ngm.com.au\/contact-us\/\"><em>Contact us<\/em><\/a><em>\u00a0if you require assistance.<\/em>[\/vc_column_text][\/vc_column][\/vc_row]<\/p>\n<\/div><\/div>","protected":false},"excerpt":{"rendered":"<p>ASIC is increasingly focusing on ensuring audit quality and auditor independence, as evidenced by its audit inspection program. Are you on ASIC&rsquo;s radar?<\/p>\n","protected":false},"author":14,"featured_media":23565,"parent":0,"menu_order":0,"comment_status":"closed","ping_status":"closed","template":"","meta":{"_acf_changed":false,"inline_featured_image":false,"footnotes":""},"categories":[],"acf":[],"yoast_head":"<!-- This site is optimized with the Yoast SEO plugin v22.8 - https:\/\/yoast.com\/wordpress\/plugins\/seo\/ -->\n<title>ASIC\u2019s audit inspection program: Are you a target? | NGM Lawyers<\/title>\n<meta name=\"description\" content=\"ASIC is increasingly focusing on ensuring audit quality and auditor independence, as evidenced by its audit inspection program. 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