Curran Clare: Auditor Regulation and External Reporting Bill — In Committee 
Curran Clare: Auditor Regulation and External Reporting Bill — In Committee 
[Volume:672;Page:18309] 
CLARE CURRAN (Labour—Dunedin South) 
: 
 I am pleased to take a call on Part 3 “Amendments to other enactments regulations transitional provisions and other miscellaneous matters”. Going back to the core reason for the Auditor Regulation and External Reporting Bill which my colleague Stuart Nash has just talked about it is about creating an independent oversight system for issuer audits in order to promote the quality and expertise of the auditor profession. Although some of us in this House might think that being an auditor is not necessarily something we would aspire to— 
Hon Members 
: Ha ha! 
CLARE CURRAN 
: —and that is not in any way meant to put down auditors—it is and it remains a critical profession. 
Lynne Pillay 
: And respected. 
CLARE CURRAN 
: And it is a very respected profession. Hands up anybody in this Chamber who is an auditor. There must be a few across— 
The CHAIRPERSON (H V Ross Robertson) 
: I am sorry to interrupt the honourable member. The debate is with the speaker standing not with members across the Chamber. 
CLARE CURRAN 
: Thank you Mr Chair. I was talking about the importance of the auditor profession. I wanted to underline that because if we do not have good auditors then we will not have a financial system we can feel confident about. Taking the merriment out of the debate I say that it is time to be serious and that it is a critical profession. 
This legislation as has been mentioned on many occasions is part of a bunch of legislation that is meant to underpin the new Financial Markets Authority. I point out that it is as yet untested. 
I am very pleased to hear tonight that the financial literacy side of the equation is apparently being addressed by this Government. I would like to see that extend to the impact that the nefarious loan sharks are having on many unsuspecting people out in the community. I would like to see the Government address that part of the equation because it all turns on the ability of people—the information that people have how informed they feel and how skilled they feel—to invest and to trust the system. Having respectable and trusted auditors is all an important part of that equation. 
This is complex legislation. It is 100 pages long as my colleague has pointed out. It is very detailed and without it I am sure that the Financial Markets Authority would be poorer. 
I also point out that this new regime will apply only to major audits of issuers and large companies. It will not impact on small and medium sized companies and non-profit entities. Issuer auditors are targeted because the investors in those entities are most at risk of losing large amounts of money which is the point I made earlier about celebrity endorsements of financial products. That is where the unsuspecting investor can get ripped off and rorted. That relates to another issue that I want to again put on the agenda for this Government to deal with which is how to deal with the issue of truth in advertising because that is critical. Not only is it critical in the financial investment side of the equation but also it is absolutely critical in other industries such as the telecommunications industry. I would like to put that on the record as well. 
Issuer audits are targeted because investors in those entities are most at risk of losing large amounts of money in the event of auditor failure. In a 2009 report the Registrar of Companies criticised a number of parties for their role in the finance company meltdown including auditors. The registrar said that the big accounting firms were not particularly interested—