Independence of Australian Company Auditors - Review of Current Australian Requirements and Proposals for Reform

Centre for Corporate Law and Securities Regulation, October 2001

231 Pages Posted: 28 Jan 2002

See all articles by Ian Ramsay

Ian Ramsay

Melbourne Law School - University of Melbourne

Abstract

There are approximately 7,000 registered company auditors in Australia according to the Australian Securities and Investments Commission. This report, which was commissioned by the Minister for Financial Services and Regulation, examines Australia's existing legislative and professional requirements on independence of company auditors and compares them with equivalent overseas requirements. Where appropriate, the report proposes measures for strengthening the Australian requirements. The report also reviews a large number of empirical studies relating to the independence of auditors.

The review has been prompted by two developments. First, recent overseas work in the area of audit independence has moved independence requirements in those regions ahead of equivalent requirements in Australia. Major developments, including the growth of the largest accounting firms and an increase in non-audit services provided by these firms, highlight the need for Australian requirements to be updated.

Second, following the failure of a number of listed Australian companies during the first half of 2001, the resultant publicity has included audit independence issues and has raised concerns about the adequacy of the Australian rules that ensure the independence of Australian accounting firms from the companies they audit.

Keywords: Auditors' independence

JEL Classification: M49, K22

Suggested Citation

Ramsay, Ian, Independence of Australian Company Auditors - Review of Current Australian Requirements and Proposals for Reform. Centre for Corporate Law and Securities Regulation, October 2001, Available at SSRN: https://ssrn.com/abstract=298122 or http://dx.doi.org/10.2139/ssrn.298122

Ian Ramsay (Contact Author)

Melbourne Law School - University of Melbourne ( email )

University Square
185 Pelham Street, Carlton
Victoria, Victoria 3010
Australia
+61 3 8344 5332 (Phone)

HOME PAGE: http://law.unimelb.edu.au/about/staff/ian-ramsay

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