SYDNEY — Australia’s financial markets regulator will tighten its oversight of auditors following an information leak scandal involving KPMG. The move is aimed at strengthening compliance with legal, professional and ethical standards.
As reported by Reuters, the Australian Securities and Investments Commission (ASIC) has sent letters to around 2,900 registered auditors, warning that it will take stronger legal action where breaches are identified.
ASIC does not have the authority to regulate accounting firms because they operate as partnerships. However, the regulator does have oversight of the auditors working within those firms.
ASIC Commissioner Kate O’Rourke said the regulator was concerned by findings that some auditors had failed to comply with legal requirements and professional and ethical standards relating to independence.
“As the regulator of registered company auditors, ASIC is concerned by a range of issues involving auditors failing to comply with the law and with professional and ethical standards requiring them to act independently and with integrity,” O’Rourke said.
She added that ASIC would more frequently pursue court action or impose disciplinary sanctions where breaches are proven.
In addition, ASIC will step up scrutiny of potential conflicts of interest between auditors and the companies they audit. The regulator will also pay particular attention to personal relationships that could compromise an auditor’s independence. (ARF/ZH)