Today, the AFR, the Chairman of ASIC, Mr Rod Medcraft made the following comments :
“Mr Medcraft put the onus on directors to contribute to audit quality by ensuring auditors receive reasonable fees and that auditor independence is protected. Price gouging is rampant in the industry, surpassing 2008 levels in the wake of the financial crisis.
(see http://www.afr.com/p/national/boards_must_drill_auditors_asic_8BSbDG724pNPUda4WWbysL – subscription required).
It is important that Directors (often through their Board Audit and Risk Subcommittee) have an active engagement in the tender for External Audit Services, approval of the annual Engagement Letter, review the financial accounts with the External Auditor and finally review their performance.
To assist directors with these processes, we have provided some documents that have been based on various books and material available, please click here to be taken to the page.
An effective external audit process required good and effective oversight by the Directors often through an engaged and active Board Audit (and Risk) Committee.