“Closer international cooperation by ASIC with overseas regulators is in Australia’s national interest because of the globalisation of capital markets,” Chris Pearce, Parliamentary Secretary to the Treasurer said.

In preparation for the arrangement between ASIC and the PCAOB, the government enacted the Australian Securities and Investments Commission Amendment (Audit Inspection) Act 2007. The Act provides a legislative framework to empower ASIC to enter into cooperative audit oversight arrangements with foreign regulators, with the consent of the minister.

“The proposed joint audit inspection process between ASIC and the PCAOB will reduce red tape here in Australia and provide significant cost savings for Australian audit firms registered with the PCAOB. The safeguards built into the legislation and the cooperative arrangement will ensure we get the right balance between ASIC’s statutory responsibilities, and protecting the interests of clients and their audit firms,” Pearce said.

The government plans to review the operation of the arrangement between ASIC and PCAOB, after the first round of triennial joint inspections have been completed in 2009, to assess whether the joint inspection process has met expectations. The first joint inspections by ASIC and PCAOB are expected to begin later this year.