The corporate regulator says that it is hoping that the threat of criminal sanctions for poor audits will be enough to make professional services firms improve standards as it scrambles to revamp its oversight regime following acrimony over the conduct of senior partners at PwC.

The Australian Securities and Investments Commission this year slashed the number of audits it reviews in its annual quality inspection regime from 45 to 30, even as the accounting sector comes under unprecedented scrutiny for leaking confidential information and for other matters.