Towards an effective Australian audit oversight function

Laws and regulations have evolved to safeguard the competence and independence of company auditors. Independence has proved more difficult to safeguard than competence. Laws and regulations addressing the tangible aspects of independence have resulted in rules-based audit oversight models. Such models have become inadequate because they do not address the intangible aspects of audit independence resulting in the professional accounting bodies establishing self-regulating ethical rules regulating these intangible factors. For many countries this has resulted in a self-regulatory audit oversight model where the oversight function has been delegated to the professional bodies. Australia's proposed move to a self-regulatory system is examined in the context of international developments.