Explanatory Memorandum
(Circulated by authority of the Minister for Revenue and Financial Services, the Hon Kelly O'Dwyer MP)General outline and financial impact
Validation of approval of auditing competency standard
The Corporations Amendment (Auditor Registration) Bill 2016 (Bill) amends the Corporations Act 2001 (Corporations Act) to address the legal consequences arising from an approval issued by the Australian Securities and Investments Commission (ASIC) in November 2004 which approved an auditing competency standard (CPA/ICAA standard) produced by CPA Australia and the Institute of Chartered Accountants in Australia.
It is likely that the relevant approval is a legislative instrument for the purposes of the Legislation Act 2003 (Legislation Act). Because certain requirements of the Legislation Act were not met, the validity of the registration of an auditor on the basis of the CPA/ICAA standard after 1 December 2005 is uncertain.
Parts of the Bill have retrospective operation. The retrospective effect of the amendments will not add any new regulatory requirements. Rather, the retrospective effect of the amendments is necessary to ensure that decisions and actions taken by auditors, the regulator and business which relied upon the enforceability and integrity of the Legislative Instrument are valid, and the retrospective effect of the Bill is necessary to provide certainty for those decisions and actions.
Date of effect: The day after the Bill receives Royal Assent.
Financial impact: The Bill provides for a right to compensation in the event that the measures contained in the Bill could affect any property rights so as to amount to an acquisition of property.
Human rights implications: This Bill does not raise human rights issues. See Statement of Compatibility with Human Rights - Chapter 2.
Compliance cost impact: Nil.