Audit reform is just more red tape: leaders

Directors have not welcomed a move by the corporate regulator to improve audit quality, according to a report in The Australian Financial Review.

Greg Medcalf, chairman of the Australian Securities and Investments Commission (ASIC), yesterday flagged plans to force companies to change auditors if the quality of audits did not improve.

ASIC claims there has been a 30% increase in auditors failing to ensure they did not make material mistakes in financial statements. However, directors says there are too few auditors to make the idea of forced change workable – and such a rule will be just another distraction for directors already struggling to focus on company strategy rather than regulations.