1. 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

2. 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

3. 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

4. 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

5. 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

6. 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

7. 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

8. 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

9. 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

10. 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