Auditors the elephant in the regulatory room

The role of auditors in the new trustee licensing regime is “the elephant in the room”, according to Trustee Corporation Association (TCA) chairman Clynton Hardy.

He said the TCA welcomes the new regime and the advent of the Financial Markets Authority and supports efforts to restore investor confidence in the wake of a series of financial collapses.

“However, if we’re to help achieve the common goal of restoring investor confidence, then we need high quality information.

While we’re pleased to see auditor registration introduced, we’re not happy with the level of auditing assurance the market is currently receiving.”

Hardy said the TCA is concerned about a “tendency among the audit profession” to disclaim as much as possible in prospectus sign-offs and shift more of the responsibility onto directors.

He said auditors seeking to distance themselves from responsibility for investment documents would be discouraging for investor confidence and that “to try and dilute responsibility is irresponsible.”

He said the TCA wanted to see more positive assurances from the audit industry rather than negative assurances and a move away from “disclaiming all liability.” “We’ll be raising our concerns with government,” he said.

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