Financial institutions and other companies may find themselves paying through the nose for proposed new internal control audits if research from the United States on the introduction of similar internal control audits is any guide.The Parliamentary Joint Committee on Corporations and Financial Services has tabled an interim report for its inquiry into audit regulation, which has amongst its 10 recommendations an expansion of the auditor's role to look at internal controls in Australia.Labor Senator Deborah O'Neill set the inquiry in train last year following a series of reports into auditors and audit services in the United Kingdom, persistent complaints for much of the decade from the corporate regulator on the decline of audit quality and media reporting of alleged non-compliance with independence standards in engagements conducted by major accounting firms and banks.Other recommendations from the parliamentary committee's interim report deal with disclosures of audit firm tenure and partner rotation as well as seeking improvements in the regulatory process related to audit administered by the Australian Securities and Investments Commission.There is also a recommendation that companies that have the same firm auditing for a decade be required to tender out an audit in the tenth year but that comes with an escape clause - companies would be able to disclose why they have not done so if they choose to keep running with the existing audit firm.The committee also urged the government to modernise the way in which financial reports and data are lodged with regulators so data is more easily analysed.Internal controls are the various elements in an entity's processes that are designed to ensure that funds are properly managed such as payment authorisations for amounts that a company makes to suppliers or clients that may be over a certain dollar threshold.The recommendation draws from legislation in the United States that was passed in the wake of the collapse of Enron requiring the review and sign off on internal controls, which is a double -edged sword for professional practices.Fees from engagements may increase but so might insurance premiums given increase in audit scope boosts the increase of exposure of auditors to litigation should there be an instance where an auditor ought to have picked something up in an internal control process that was subsequently found to be a contributing factor to fraud or error.Mandated internal control audits caused fees to skyrocket in the United States despite the assurance of Congress that the internal control audits would not increase the costs to companies filing to the Securities and Exchange Commission.Research published in 2018 by researchers from the University of Kansas, University of North Texas and University of Massachusetts Amherst looking at the impact of the introduction of the internal controls regulations in the Sarbanes Oxley laws found that Congress' assurance that audit fees would not increase were disproven.Michael Ettredge, Matthew Sherwood and Lili Sun looked at fee data following the introduction of the Sarbanes Oxley rules related to internal control sign offs and found that it represented an opportunity for accounting