This audit would assess the effectiveness of the Australian Securities and Investments Commission’s (ASIC’s) oversight of audit quality under the Corporations Act 2001.

ASIC is responsible for administering the requirements of the Corporations Act 2001 as it relates to auditor independence (Divisions 3, 4 and 5 of Part 2M.4) and audit quality (Division 3 of Part 2M.3). ASIC commenced an audit inspection program in 2004–05 which aims to raise the standard of audit quality and auditor independence in the profession. Audit firm inspections and auditor surveillances are key compliance tools aimed at educating and influencing behaviour of registered company auditors and audit firms. Enforcement action can be taken where significant non-compliance is identified.