This Bill implements legislative proposals arising from responses to the Audit quality in Australia: A strategic review released by the Treasury in 2010.
Overall, it was found that Australia’s audit processes were sufficient, but there was amendment in relation to the auditor rotation period.
The Bill has kept the mandatory five year rotation of auditors but has introduced an allowance for flexibility which would mean directors of listed companies or registered schemes could extend, by two years, the rotation period if the directors comply with requirements to protect auditor independence and quality. This allowance for an extension of rotation period is aimed at reducing the regulatory burden placed upon audit firms.
The Bill also introduces a requirement for firms conducting audits of ten or more Australian listed companies, listed registered scheme, authorised deposit-taking institutions or insurance companies to publish annual transparency reports.