An agreement to cooperate and exchange information has been signed by the Australian Securities and Investments Commission (ASIC) and the Financial Reporting Council (FRC).
The Memorandum of Understanding (MOU) will assist the two agencies in discharging their responsibilities in relation to the auditor independence requirements of the CLERP (Audit Reform and Corporate Disclosure) legislation (CLERP 9).
While ASIC and the FRC have different roles in relation to auditor independence, the MOU recognises that both have information that will be complementary to their respective roles.
The FRC is responsible for the oversight of the auditing and accounting standard setting, and monitoring and assessing the nature and overall adequacy of the auditor independence arrangements and audit-related disclosure.
ASIC is responsible for surveillance, investigation and enforcement of the responsibilities of companies and auditors in relation to financial reporting, including the enforcement of auditor independence requirements contained in the Corporations Act 2001.
The MOU sets out the information to be shared between the agencies, including regular reports to be provided by each agency to the other, the confidentiality obligations of each agency, and the agencies’ agreement to hold regular liaison meetings and consult about policy issues.
Greater communication and cooperation between ASIC and the FRC should ensure that the auditor independence provisions in the CLERP 9 legislation are administered smoothly and effectively.
The full text of the MOU is available from www.asic.gov.au.
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