CCH Note:
Part 13 of the
Corporations Act 1989, inserted
by sec 6 of No 110 of 1990, Sch 1 (effective 1 January 1991), begins as
follows:
PART 13 - THE CORPORATIONS LAW
THE CORPORATIONS LAW
82
The Corporations Law is as follows:...
CHAPTER 2M - FINANCIAL REPORTS AND AUDIT
History
Chapter 2M inserted by No 61 of 1998, Sch 1 (effective 1 July 1998).
PART 2M.4 - APPOINTMENT AND REMOVAL OF AUDITORS
History
Part 2M.4 heading substituted by 156 of 1999, Sch 8 (effective 1 July 1998).
Part 2M.4 inserted by No 61 of 1998, Sch 1 (effective 1 July 1998).
Division 1 - Companies
History
Heading inserted by No 156 of 1999, Sch 8 (effective 1 July 1998).
SECTION 327
APPOINTMENT OF AUDITORS
327(1A)
[Application]
Only subsections
(6) to
(10) of this section apply to a proprietary company.
History
S 327(1A) inserted by No 61 of 1998, Sch 2, Pt 4 (effective 1 July 1998).
327(1)
[Within 1 month after incorporation]
Within 1 month after the day on which a company is incorporated, the directors of the company shall appoint, unless the company at a general meeting has appointed, a person or persons, a firm or firms, or a person or persons and a firm or firms, as auditor or auditors of the company.
327(2)
[Duration of first appointment]
A person or firm appointed as auditor of a company under subsection
(1) holds office, subject to this Part, until the first annual general meeting of the company.
327(3)
[Appointment at annual general meetings]
A company shall:
(a)
at its first annual general meeting appoint a person or persons, a firm or firms, or a person or persons and a firm or firms, as auditor or auditors of the company; and
(b)
at each subsequent annual general meeting, if there is a vacancy in the office of auditor of the company, appoint a person or persons, a firm or firms, or a person or persons and a firm or firms, to fill the vacancy.
327(4)
[Duration of appointment]
A person or firm appointed as auditor under subsection
(3) holds office until death or removal or resignation from office in accordance with section
329 or until ceasing to be capable of acting as auditor by reason of subsection
324(1) or
(2).
327(5)
[Vacancy in office]
Within 1 month after a vacancy, other than a vacancy caused by the removal of an auditor from office, occurs in the office of auditor of the company, if there is no surviving or continuing auditor of the company, the directors shall, unless:
(a)
the company at a general meeting has appointed a person or persons, a firm or firms, or a person or persons and a firm or firms, to fill the vacancy;
(b)
(Repealed by No 61 of 1998, Sch 2, Pt 4 (effective 1 July 1998).)
appoint a person or persons, a firm or firms, or a person or persons and a firm or firms, to fill the vacancy.
History
S 327(5) amended by No 61 of 1998, Sch 2, Pt 4 (effective 1 July 1998).
S 327(5) amended by No 115 of 1995, Sch 4 (effective 9 December 1995).
327(6)
[Continuing auditor]
While a vacancy in the office of auditor continues, the surviving or continuing auditor or auditors (if any) may act.
327(7)
[Prior consent to act]
A company or the directors of a company shall not appoint a person or firm as auditor of the company unless that person or firm has, before the appointment, consented by notice in writing given to the company or to the directors to act as auditor and has not withdrawn his, her or its consent by notice in writing given to the company or to the directors.
327(8)
[Signature of consent]
A notice under subsection
(7) given by a firm shall be signed in the firm name and in his or her own name by a member of the firm who is a registered company auditor.
327(9)
[Appointment without consent]
If a company appoints a person or firm as auditor of a company in contravention of subsection
(7), the purported appointment does not have any effect and the company and any officer of the company who is in default are each guilty of an offence.
327(10)
[Appointment of new auditor]
Where an auditor of a company is removed from office at a general meeting in accordance with section
329:
(a)
the company may at that meeting (without adjournment), by a resolution passed by a majority of not less than three-quarters of such members of the company as, being entitled so to do, vote in person or, where proxies are allowed, by proxy, forthwith appoint as auditor or auditors a person or persons, a firm or firms, or a person or persons and a firm or firms, to whom or which has been sent a copy of the notice of nomination in accordance with subsection
328(3); or
(b)
if such a resolution is not passed or, by reason only that such a copy of the notice of nomination has not been sent to a person, could not be passed, the meeting may be adjourned to a day not earlier than 20 days and not later than 30 days after the day of the meeting and the company may, at the adjourned meeting, by ordinary resolution appoint as auditor or auditors a person or persons, a firm or firms, or a person or persons and a firm or firms, notice of whose nomination for appointment as auditor has been received by the company from a member of the company at least 14 clear days before the day to which the meeting is adjourned.
327(11)
[Failure to appoint new auditor]
Where, after the removal from office of an auditor of a company, the company fails to appoint an auditor under subsection
(10), the company shall, within the period of 7 days commencing on the day of the failure, give to the Commission notice of the failure, and, subject to subsection
(12), the Commission:
(a)
in a case where the company, before the end of that period, gives to the Commission notice of the failure - shall, upon receiving the notice; or
(b)
in any other case:
(i) may, at any time after the end of that period and before the Commission receives from the company notice of the failure; and
(ii) if the company, after the end of that period, gives to the Commission notice of the failure - shall, upon receiving the notice;
appoint as auditor or auditors of the company a person or persons, a firm or firms, or a person or persons and a firm or firms, who or which consents or consent to be so appointed.
History
S 327(11) amended by No 110 of 1990, Sch 4 (effective 1 January 1991).
327(12)
[Exception to Commission's power to appoint]
Where, after the removal from office of an auditor of a company, the company fails to appoint an auditor under subsection
(10), the Commission shall not appoint an auditor of the company under subsection
(11):
(a)
in any case - if there is another auditor of the company whom the Commission believes to be able to carry out the responsibilities of auditor alone and who agrees to continue as auditor;
(b)
(Repealed by No of 61 1998, Sch 2, Pt 4 (effective 1 July 1998).)
(c)
in a case where, at the end of the period of 7 days commencing on the day of the failure, the company has not given to the Commission notice of the failure - if the Commission has, at any time after the end of that period, already appointed an auditor of the company under subsection
(11).
History
S 327(12) amended by No 61 of 1998, Sch 2, Pt 4 (effective 1 July 1998).
S 327(12) amended by No 115 of 1995, Sch 4 (effective 9 December 1995).
327(13)
[Commission may appoint auditor]
Subject to subsection
(11), if a company does not appoint an auditor when required by this Law to do so, the Commission may, on the application in writing of a member of the company, appoint as auditor or auditors of the company a person or persons, a firm or firms, or a person or persons and a firm or firms, who or which consents or consent to be so appointed.
History
S 327(13) amended by No 110 of 1991, Sch 5 (effective 27 June 1991).
327(14)
[Duration of appointment]
A person or firm appointed as auditor of a company under subsection
(5),
(10),
(11) or
(13) holds office, subject to this Part, until the next annual general meeting of the company.
History
S 327(14) amended by No 110 of 1990, Sch 4 (effective 1 January 1991).
327(15)
[Where a company becomes controlled]
Notwithstanding subsection
(4), a person or firm who holds the office of auditor of a company that begins to be controlled by a corporation must, unless the person or firm sooner vacates that office, retire at the annual general meeting of the company next held after it begins to be controlled by the corporation but, subject to this Part, is eligible for re-appointment.
History
S 327(15) amended by No 110 of 1991, Sch 3 (effective 1 August 1991).
S 327(15) amended by No 110 of 1990, Sch 4 (effective 1 January 1991).
CCH Note:
By virtue of sec 1364(2) of the Corporations Law, Pt 3.6 and 3.7, as in force before amendments were made by No 110 of 1991, sec 7 and Sch 3, continue to apply in relation to a company in relation to a financial year of the company that ended before 31 December 1991. Section 327(15) as in force before being amended by No 110 of 1991 is reproduced below:
327(15)
[Where a company becomes a subsidiary]
Notwithstanding subsection (4), a person or firm who holds the office of auditor of a company that becomes a subsidiary of a corporation shall, unless the person or firm sooner vacates that office, retire at the annual general meeting of that subsidiary next held after it becomes such a subsidiary but, subject to this Part, is eligible for re-appointment.
327(16)
[Offence]
If a director of a company fails to take all reasonable steps to comply with, or to secure compliance with, subsection
(1) or
(5), he or she is guilty of an offence.