Submission to the Department of Treasury on Audit Inspection Powers

28 November 2005

The General Manager
Corporations and Financial Services Division
Department of the Treasury
Langton Crescent
PARKES ACT 2600
plevy@treasury.gov.au

Dear Sir/Madam

Audit Inspection Powers

The Group of 100 (G100) is pleased to comment on the Consultation Paper and appreciates being given an extension of time to complete the submission. The G100 which is an organisation representing the interests of CFOs of Australia’s largest business enterprises is generally supportive of the proposals provided that they are reciprocal arrangements. As the proposals relate to the activities of the Public Company Accounting Oversight Board (US) we believe that the arrangements should be considered in this context.

1.	Expanding ASIC’s functions to cover arrangements with foreign regulatory agencies. While supporting the proposed expansion of ASIC’s functions to cover arrangements with foreign regulators, the G100 believes that strict criteria for applying the proposed requirements should be established. The proposal is argued in the context of US regulators and we believe the case is justified in respect of US regulators. However, we do not believe that it should apply as a matter of course for regulators in other jurisdictions.
2.	A new audit inspection and information gathering power The G100 supports the proposed inspection and information gathering power in respect of arrangements made with the relevant US regulator in relation to Australian entities that are US registrants.
3.	Auditor must assist ASIC The G100 agrees that, in principle, the auditor should assist ASIC in the discharge of its obligations but is concerned about the scope of this proposal and how it relates to issues of auditor/client confidentiality.
4.	Authorisation to share information with foreign regulator The G100 supports proposals for ASIC to share information gathered in respect of an arrangement with the foreign regulator, being a US regulator, relating to the audit of Australian companies that are US registrants.
5.	Publicity and reporting The G100 supports these proposals.
6.	Powers and requirements regarding domestic audit The G100 does not support the extension of the powers to all domestic entities subject to regulation by ASIC. However, it would be incongruous for ASIC to be given enhanced powers in relation to the audit and arrangements with foreign regulators and not have those powers domestically in relation to the same matters addressed on behalf of the foreign (US) regulator.

Yours sincerely

Tom Honan
National President