An Analysis of Submissions on Proposed Regulations for Audit and Assurance in New Zealand

Abstract

After numerous collapses of finance companies in New Zealand, and widespread losses by investors, self-regulation of the auditing profession was no longer considered adequate, or acceptable internationally. The Government sought to restore public perceptions of audit quality and investor confidence in the financial markets with proposals to change existing accounting standards and audit and assurance requirements. The proposals included a review engagement for some entities, and imposing the force of law on auditing standards. We analyse the public submissions on the auditing and assurance aspects of these proposals. Many respondents objected to the proposal requiring small public sector and not-for-profit entities to obtain review engagements, and to giving auditing standards the force of law.

Keywords: Auditing, Regulation, Review Engagements, Financial Report Preparers

JEL Classification: M40, M42, M48