A fifth of Australia auditors not doing proper job, says regulator

Almost 20 per cent of auditors were not doing their job properly, causing significant decline in auditing standards over the past 18 months, a report by the the markets regulator Australian Securities and Investments Commission (ASIC) shows.

In 18 per cent of the 602 key areas reviewed, auditors failed to obtain sufficient evidence or exercise sufficient scepticism.

According to ASIC chairman Greg Medcraft, the results were disappointing but there was no crisis in the industry he said.

In a teleconference today, Medcraft said it was "two strikes or yellow strikes". He added the audit industry and firms of all sizes could not continue in a state of denial over the findings.

Medcraft said he was concerned that a deterioration of standards could lead to investor losses and a loss of confidence.

Even as he refused to identify individual firms, ASIC said many companies failed to comply with auditing standards.