The overall reaction to Australia’s new audit standards has been poor, with financial services chief executives and fund managers divided, a survey has found.
According to findings from CPA Australia’s sixth annual Confidence in Corporate Reporting survey, 25 per cent of fund managers believed audit quality had improved, while 41 per cent of directors and chief executives said it had not.
The 2007 survey also found only 53 per cent of auditors believed the new standards had improved audit quality, while 21 per cent did not and 26 per cent were unsure.
There were also mixed feelings about whether the standards had improved confidence in financial reporting. Fifty-eight per cent of auditors felt more confident, while 50 per cent of directors, chief executives and chief financial officers said their confidence was no greater than before the introduction of the standards.
Commenting on the survey’s findings, CPA Australia chief executive Geoff Rankin said: “While it’s disappointing that perceptions of improvements to audit quality aren’t higher among auditors, this may be a reaction to the initial investments auditors have had to make following application of the standards, such as training and updating of the audit manual. We expect the perception of audit quality to improve in following years.”
In May 2006, the Auditing and Assurance Standards Board issued 35 new legally enforceable Australian Auditing Standards, which apply to all audits conducted under the Corporations Act.
The survey was conducted during October and November and surveyed 300 members of the public, as well as 200 directors/chief executives/chief financial officers, 150 financial analysts, advisers and stockbrokers, 100 auditors and 44 institutional investors and fund managers.
