Kelly O'Dwyer (Higgins, Liberal Party, Minister for Revenue and Financial Services) Share this | Hansard source

I move:

That this bill be now read a second time.

Today I introduce a bill which will ensure the ongoing validity of certain auditor registrations from December 2005. Government regulation of company auditors requires minimum standards of both competence and integrity to help protect investors and other users of financial reports. This is an important part of a robust financial reporting and auditing framework.

Audit quality and independence is important to ensuring the integrity of financial statements. Transparent and credible financial reporting coupled with an effective audit regime underpins confidence in our financial system and is essential for sound and sustainable economic growth.

The bill remedies the legal uncertainties surrounding the Australian Securities and Investments Commission's approval in November 2004 of an auditing competency standard produced by CPA Australia and the Institute of Chartered Accountants in Australia, now known as Chartered Accountants Australia and New Zealand.

In November 2004 certain administrative requirements, which legislation required to be followed in relation to ASIC's approval, were not met. After 1 December 2005, the legal validity of auditors registered in reliance on that standard has been uncertain.

The bill remedies this uncertainty by retrospectively validating the registration of auditors registered under the relevant auditing standard. It provides a clear and permanent legislative solution to an issue which has so far been dealt with through a solution which must be periodically renewed. In doing so, it reduces compliance costs and increases certainty for business.

The retrospective effect of the amendments will not add any new regulatory requirement. Rather, the retrospective effect of the amendments is necessary to ensure that decisions and actions taken by auditors, ASIC and business, which relied upon the enforceability and integrity of the approval, are valid. The retrospective operation of the bill provide certainty for those past decisions and actions.

The bill will commence the day after the bill receives royal assent.

Finally, the Legislative and Governance Forum for Corporations was consulted in relation to the amendments and has approved them, as required under the Corporations Agreement 2002.

Debate adjourned.

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