ICAA-MICPA Audit Forum Audit Oversight Board – Implications for Public Interest Entities Lee White General Manager - Leadership & Quality The Institute of Chartered Accountants in Australia Tuesday 3 August 2010

Australian Experience on AOB Some brief facts Started in early 2005 Undertaken in a staged approach – independence then audit quality Reach of the inspection was initially at larger firms Small team (mainly ex audit practitioners) that started to grow ICAA – MICPA AUDIT FORUM Audit Oversight Board – Implications for Public Interest Entities Tuesday 3 August 2010

Australian Experience on AOB Some brief facts Audit inspection commenced at a time of other significant change in Australia Methodology and approach – risk based; had to be developed International links (IOSCO/IFIAR) and learnings ICAA – MICPA AUDIT FORUM Audit Oversight Board – Implications for Public Interest Entities Tuesday 3 August 2010

Implications of Oversight Financial Reporting Chain Preparer Board / Audit Committee Auditor Investor / User Regulator / Audit Oversight ICAA – MICPA AUDIT FORUM Audit Oversight Board – Implications for Public Interest Entities Tuesday 3 August 2010

Implications of Oversight Themes to Discuss Awareness – or more particular the lack! Engagement by Public Interest Entities – or more particular the lack! Flow of Information ICAA – MICPA AUDIT FORUM Audit Oversight Board – Implications for Public Interest Entities Tuesday 3 August 2010

Implications of Oversight Themes to Discuss - Initial concerns More regulatory burden on business Capital market understanding Cost to the Public Interest Entities – being passed via increasing audit fees Fewer providers of audit services and less competition ICAA – MICPA AUDIT FORUM Audit Oversight Board – Implications for Public Interest Entities Tuesday 3 August 2010

Implications of Oversight Themes to Discuss - Initial concerns Access to your information via audit working papers Accounting treatments could change Public Reporting – potential for PIEs to be identified Adverse corporate brand damage ICAA – MICPA AUDIT FORUM Audit Oversight Board – Implications for Public Interest Entities Tuesday 3 August 2010

Implications of Oversight Themes to Discuss - Successes External recognition of improvement to the regulatory framework – attracting global monies Stimulated greater engagement between the PIE and the external auditor Clearer and evolving understanding of audit quality ICAA – MICPA AUDIT FORUM Audit Oversight Board – Implications for Public Interest Entities Tuesday 3 August 2010

Implications of Oversight Themes to Discuss - Successes Information provided to the PIEs to assess the effectiveness of audit quality Non-audit services – getting the balance right ICAA – MICPA AUDIT FORUM Audit Oversight Board – Implications for Public Interest Entities Tuesday 3 August 2010

Implications of Oversight Themes to Discuss – Other matters International developments How to make the relationship stronger ICAA – MICPA AUDIT FORUM Audit Oversight Board – Implications for Public Interest Entities Tuesday 3 August 2010