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Dear students,
Please ensure you carefully read the ASIC report and understand the issues as they have detailed. Your assignment shoudl be of a minimum of 2,000 words but some students may wish to add more. As such, there is no maximum.

A report is provided from ASIC providing their findings on Audits/auditors for the year 2011-2012. The report highlighted some key aspects of which ASIC were dissatisfied with.

You are required to read the report, disseminating the key issues and discuss what you feel are the implications of this determined deterioration and why. Then make some recommendations as to how you feel both the Auditing sector as well as ASIC can address this.

You may well look to carry out further research before making any assessment of the situation.

Note: do not just copy and paste, showing an understanding of the issues is required.

REPORT 317

Audit inspection program

report for 2011–12

December 2012

About this report

This report summarises the observations and findings identified by ASIC’s

audit inspection program in the 18 months to 30 June 2012.

We expect this report to be of significant interest both to the inspected firms

and those firms we have not inspected, as well as companies, audit

committees, investors and other stakeholders interested in financial

reporting.REPORT 317: Audit inspection program report for 2011–12

© Australian Securities and Investments Commission December 2012 Page 2

About ASIC regulatory documents

In administering legislation ASIC issues the following types of regulatory

documents.

Consultation papers: seek feedback from stakeholders on matters ASIC

is considering, such as proposed relief or proposed regulatory guidance.

Regulatory guides: give guidance to regulated entities by:

? explaining when and how ASIC will exercise specific powers under

legislation (primarily the Corporations Act)

? explaining how ASIC interprets the law

? describing the principles underlying ASIC’s approach

? giving practical guidance (e.g. describing the steps of a process such

as applying for a licence or giving practical examples of how

regulated entities may decide to meet their obligations).

Information sheets: provide concise guidance on a specific process or

compliance issue or an overview of detailed guidance.

Reports: describe ASIC compliance or relief activity or the results of a

research project.

Scope

Sections of this report may describe deficiencies or potential deficiencies in

the systems, policies, procedures, practices or conduct of some of the

20 audit firms inspected. The absence of a reference in this report to any

other aspect of a firm’s systems, policies, procedures, practices or conduct

is not an approval by ASIC of those aspects, or any indication that in ASIC’s

view those aspects comply with relevant laws and standards.

In the course of reviewing specific areas in a limited sample of selected audit

engagements, an inspection may identify ways in which a particular audit is

deficient. It is not the purpose of an inspection, however, to review all of the

firm’s audit engagements or to identify every aspect in which a reviewed audit

may be deficient. Accordingly, this report does not provide assurance that the

firms’ audits, or their clients’ financial statements, are free of deficiencies apart

from those described in this report.

Unless stated otherwise, not all matters in this report apply to every firm and,

where they do apply to more than one firm, there will often be differences in

degree. Our observations and findings relate only to the individual firms

inspected. Our observations and findings can differ significantly, even

between firms of similar size, and for that reason we caution against drawing

conclusions about any individual firms.

This report covers audit firm inspections only and does not include...
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