AUDITING

Auditing

Transparency in Auditing Process

Introduction

The financial crises all over the world created new challenges and complexities for the auditors to assess risk and uncertainty in auditing process. The purpose of this report is to assess the importance of enhancing transparency and quality of auditing process. This is an important issue in auditing nowadays. This paper provides an opportunity to assess the impact of uncertain economic environment on the transparency and accountability of the auditing process. The audit report is the investor's most primary source of information about the audit process. Transparency and Accountability are the two most importance parts of good governance. Transparency can be defined as operating or doing business in such a way that it is easy for others to see what action is being taken.

The Corporations Legislation Amendment Act 2012 was passed by federal government on 27 June 2012 as Act no 72 of 2012. The legislation proposed certain amendments to Australia's auditing regulatory framework. The objective of the legislation is to improve the transparency and quality of the auditing process. The audit enhancement bill inserts part 2M.4A in to the Corporations Act. The purpose is to emphasize the transparency and quality of auditing process so as to ensure that the investors get the right information from the auditing process through auditing report.

The methodology adopted in the legislation paper identifies the main driver of the audit transparency and quality of the auditing process in Australia. It also assess the threats to these main drivers and what steps and measures can be taken to deal with them in order to perform a quality auditing process. The Corporation Legislation Bill Act 2012 is created as a result of treasury review of stakeholder consultation and audit quality during 2011 of the measures designed to enhance quality of auditing process and also to make sure that the Australian auditing regulating framework is in line with international practices.

Discussion

Following measures are included in the bill:

Audit firms are required to publish annual transparency report if they perform audit of 10 significant entities

Authorizing ASIC to issue a deficiency report on auditing process in relation to individual firm's auditing process if any deficiency is found in the auditors procedure of auditing process which in turn will affect the overall quality of auditing process.

To remove any repetition or duplication of Financial Reporting Council and ASIC inspection and audit responsibilities and duties. This will help ASIC ...