Shanks Katrina: Auditor Regulation Bill Financial Reporting Amendment Bill — Third Readings 
Text is incorporated into the Bound Volume 
Shanks Katrina: Auditor Regulation Bill Financial Reporting Amendment Bill — Third Readings 
[Sitting date: 11 May 2011. Volume:672;Page:18629. Text is incorporated into the Bound Volume.] 
KATRINA SHANKS (National) 
: 
 It is my pleasure to take a call on the Auditor Regulation Bill and the Financial Reporting Amendment Bill at their third readings. The National-led Government is absolutely committed to improving the integrity of our financial system.  
In 2008  
Business Week  
named New Zealand as one of 13 nations at most risk from the global financial crisis. On too many occasions during the finance company collapses we heard of investors losing money and of there being limited recourse for them to find assistance to reclaim it or any way for them to claim against their losses. That has damaged investor confidence and if we are to restore that confidence we need to make changes. Our Government wants to assure investors that we are committed to ensuring that the Financial Markets Authority has the powers it needs and is encouraged to use them.  
The Financial Markets Authority opened for business on 1 May and takes over the functions of the Securities Commission and the Government Actuary. This new authority will lift the bar in terms of market behaviour and will have the tools it needs to help to restore investor confidence in our financial markets which has taken a battering in recent years. It is clear that if we are to broaden and deepen our financial markets to benefit companies looking to raise capital our financial sector must be subject to clear rules and visible proactive and timely enforcement. I believe we have worked hard to create legislation that will strengthen the regulation of practitioners who carry out issuer audits and that consolidates the setting of accounting and auditing standards within the new External Reporting Board.  
When the Commerce Committee met to discuss the legislation one of the main issues raised was the importance of providing a high level of assurance that financial statements are free from error and can be relied upon. We know that the quality of information is absolutely vital for sound business and economic decisions and this legislation address that harm. By targeting the class of audits where investors are most at risk of losing substantial amounts of money in the event of audit failure we can begin to bring back some confidence for investors. The establishment of a single Crown entity the External Reporting Board will consolidate financial reporting auditing and assurance standards.  
We also looked closely at licensing regulations and in particular we made the recommendation that auditing firms be registered. We see that as fundamental to ensuring the competence of practitioners and the quality of auditing firms’ systems processes and procedures. The legislation will bring New Zealand’s auditor regulation system up to internationally acceptable standards ensuring that New Zealanders can work overseas and can continue to carry out audits of overseas-owned New Zealand entities.  
This legislation has substantially reduced the future risk of issuer audit failure and will ensure that investors once again have the confidence to invest. I commend this legislation to the House.