CHAPTER 2M
-
FINANCIAL REPORTS AND AUDIT
PART 2M.4
-
APPOINTMENT AND REMOVAL OF AUDITORS
Division 1
-
Entities that may be appointed as an auditor for a company, registered scheme or registrable superannuation entity
History
Div 1 heading amended by No 29 of 2023, s 3, Sch 6[78] (effective 1 July 2023).
Div 1 heading substituted by No 103 of 2004, s 3, Sch 1, Pt 3
[
94].
SECTION 324
324
QUALIFICATIONS OF AUDITORS
(Repealed by No 103 of 2004, s 3, Sch 1, Pt 3
[
95] (effective 1 July 2004).)
SECTION 324AA
INDIVIDUAL AUDITORS, AUDIT FIRMS AND AUTHORISED AUDIT COMPANIES
324AA(1)
Subject to this Part, the following may be appointed as auditor for a company or a registered scheme for the purposes of this Act:
(a)
an individual;
(b)
a firm;
(c)
a company.
The company or registered scheme may have more than one auditor.
History
S 324AA(1) amended by No 29 of 2023, s 3, Sch 6[79] (effective 1 July 2023).
324AA(2)
Subject to this Part, the following may be appointed as auditor for a registrable superannuation entity for the purposes of this Chapter:
(a)
an individual;
(b)
a firm;
(c)
a company.
The entity may only have one auditor.
Note: In addition to audit requirements under this Chapter, a registrable superannuation entity has audit requirements under the RSE licensee law. Subsection
35AC(8)
of the
Superannuation Industry (Supervision) Act 1993
provides that the RSE licensee for a registrable superannuation entity must ensure that the auditor of the entity for the purposes of the RSE licensee law is the individual, firm or company thatis the auditor of the entity for the purposes of this Chapter.
History
S 324AA(2) inserted by No 29 of 2023, s 3, Sch 6[80] (effective 1 July 2023).
History
S 324AA inserted by No 103 of 2004, s 3, Sch 1, Pt 3
[
95].
SECTION 324AB
EFFECT OF APPOINTING FIRM AS AUDITOR
-
GENERAL
324AB(1)
The appointment of a firm as auditor of a company, registered scheme or registrable superannuation entity is taken to be an appointment of all persons who, at the date of the appointment, are:
(a)
members of the firm; and
(b)
registered company auditors.
This is so whether or not those persons are resident in Australia.
History
S 324AB(1) amended by No 29 of 2023, s 3, Sch 6[81] (effective 1 July 2023).
324AB(2)
The appointment of the members of a firm as auditors of a company, registered scheme or registrable superannuation entity that is taken by subsection
(1)
to have been made because of the appointment of the firm as auditor of the company, scheme or entity is not affected by the dissolution of the firm. This subsection has effect subject to section
324AC
.
History
S 324AB(2) amended by No 29 of 2023, s 3, Sch 6[81] and [82] (effective 1 July 2023).
324AB(3)
A report or notice that purports to be made or given by a firm appointed as auditor of a company, registered scheme or registrable superannuation entity is not taken to be duly made or given unless it is signed by a member of the firm who is a registered company auditor both:
(a)
in the firm name; and
(b)
in his or her own name.
History
S 324AB(3) amended by No 29 of 2023, s 3, Sch 6[83] (effective 1 July 2023).
324AB(4)
A notice required or permitted to be given to an audit firm under the Corporations legislation may be given to the firm by giving the notice to a member of the firm.
324AB(5)
For the purposes of criminal proceedings under this Act against a member of an audit firm, an act or omission by:
(a)
a member of the firm; or
(b)
an employee or agent of the audit firm;
acting within the actual or apparent scope of his or her employment, or within his or her actual or apparent authority, is also to be attributed to the audit firm.
History
S 324AB inserted by No 103 of 2004, s 3, Sch 1, Pt 3
[
95].
SECTION 324AC
EFFECT OF APPOINTING FIRM AS AUDITOR
-
RECONSTITUTION OF FIRM
Reconstitution of firm
324AC(1)
This section deals with the situation in which:
(a)
a firm is appointed as auditor of a company, registered scheme or registrable superannuation entity; and
(b)
the firm is reconstituted because of either or both of the following:
(i)
the death, retirement or withdrawal of a member or members; or
(ii)
the admission of a new member or new members.
History
S 324AC(1) amended by No 29 of 2023, s 3, Sch 6[84] (effective 1 July 2023).
Retiring or withdrawing member
324AC(2)
A person who:
(a)
is taken under subsection
324AB(1)
to be an auditor of the company; and
(b)
retires or withdraws from the firm as previously constituted as mentioned in subparagraph
(1)(b)(i)
of this section;
is taken to resign as auditor of the company as from the day of his or her retirement or withdrawal.
324AC(3)
Section
329
does not apply to the resignation that is taken to occur under subsection
(2)
unless:
(a)
the person who is taken to have resigned was the only member of the firm who was a registered company auditor; and
(b)
there is no member of the firm who is a registered company auditor after that person retires or withdraws from the firm.
New member
324AC(4)
A person who:
(a)
is a registered company auditor; and
(b)
is admitted to the firm as mentioned in subparagraph
(1)(b)(ii)
;
is taken to have been appointed as an auditor of the company, registered scheme or registrable superannuation entity as from the day of his or her admission to the firm.
History
S 324AC(4) amended by No 29 of 2023, s 3, Sch 6[85] (effective 1 July 2023).
Appointments of continuing members not affected
324AC(5)
The reconstitution of the firm does not affect the appointment of the continuing members of the firm who are registered company auditors as auditors of the company, registered scheme or registrable superannuation entity.
History
S 324AC(5) amended by No 29 of 2023, s 3, Sch 6[85] (effective 1 July 2023).
324AC(6)
Nothing in this section affects the operation of section
324BB
.
History
S 324AC inserted by No 103 of 2004, s 3, Sch 1, Pt 3
[
95].
SECTION 324AD
EFFECT OF APPOINTING COMPANY AS AUDITOR
324AD(1)
A report or notice that purports to be made or given by an audit company appointed as auditor of a company, registered scheme or registrable superannuation entity is not taken to be duly made or given unless it is signed by a director of the audit company (or the lead auditor or review auditor for the audit) both:
(a)
in the audit company
'
s name; and
(b)
in his or her own name.
History
S 324AD(1) amended by No 29 of 2023, s 3, Sch 6[86] (effective 1 July 2023).
324AD(2)
For the purposes of criminal proceedings under this Act against a director of an audit company, an act or omission by:
(a)
an officer of the audit company; or
(b)
an employee or agent of the audit company;
acting within the actual or apparent scope of his or her employment, or within his or her actual or apparent authority, is also to be attributed to the audit company.
History
S 324AD inserted by No 103 of 2004, s 3, Sch 1, Pt 3
[
95].
SECTION 324AE
324AE
MEANING OF PROFESSIONAL MEMBER
-
AUDIT TEAM
If an individual auditor, audit firm or audit company conducts an audit of a company or registered scheme, a person who is any of the following is a
professional member
of the audit team for the audit:
(a)
a registered company auditor who participates in the conduct of the audit;
(b)
a person who participates in the conduct of the audit and, in the course of doing so, exercises professional judgement in relation to the application of or compliance with:
(i)
accounting standards; or
(ii)
auditing standards; or
(iii)
the provisions of this Act dealing with financial reporting and the conduct of audits; and
(c)
a person who is in a position to directly influence the outcome of the audit because of the role they play in the design, planning, management, supervision or oversight of the audit;
(d)
a person who recommends or decides what the lead auditor is to be paid in connection with the performance of the audit;
(e)
a person who provides, or takes part in providing, quality control for the audit.
History
S 324AE substituted by No 69 of 2023, s 3, Sch 2[148] (effective 15 September 2023).
SECTION 324AF
MEANING OF LEAD AUDITOR AND REVIEW AUDITOR
Lead auditor
324AF(1)
If an audit firm or audit company conducts an audit of a company, registered scheme or registrable superannuation entity, the
lead auditor
for the audit is the registered company auditor who is primarily responsible to the audit firm or the audit company for the conduct of the audit.
History
S 324AF(1) amended by No 29 of 2023, s 3, Sch 6[88] (effective 1 July 2023).
Review auditor
324AF(2)
If an individual auditor, audit firm or audit company conducts an audit of a company, registered scheme or registrable superannuation entity, the
review auditor
for the audit is the registered company auditor (if any) who is primarily responsible to the individual auditor, the audit firm or the audit company for reviewing the conduct of the audit.
History
S 324AF(2) amended by No 29 of 2023, s 3, Sch 6[88] (effective 1 July 2023).
History
S 324AF inserted by No 103 of 2004, s 3, Sch 1, Pt 3
[
95].
Division 2
-
Registration requirements
History
Div 2 inserted by No 103 of 2004, s 3, Sch 1, Pt 3
[
95] (effective 1 July 2004).
SECTION 324BA
324BA
REGISTRATION REQUIREMENTS FOR APPOINTMENT OF INDIVIDUAL AS AUDITOR
Subject to section
324BD
, an individual contravenes this section if:
(a)
the individual:
(i)
consents to be appointed as auditor of a company, registered scheme or registrable superannuation entity; or
(ii)
acts as auditor of a company, registered scheme or registrable superannuation entity; or
(iii)
prepares a report required by this Act to be prepared by a registered company auditor or by an auditor of a company, registered scheme or registrable superannuation entity; and
(b)
the person is not a registered company auditor.
History
S 324BA amended by No 29 of 2023, s 3, Sch 6[89] (effective 1 July 2023).
S 324BA inserted by No 103 of 2004, s 3, Sch 1, Pt 3
[
95].
SECTION 324BB
REGISTRATION REQUIREMENTS FOR APPOINTMENT OF FIRM AS AUDITOR
Contraventions by members of firm
324BB(1)
A person (the
defendant
) contravenes this subsection if:
(a)
at a particular time, a firm:
(i)
consents to be appointed as auditor of a company, registered scheme or registrable superannuation entity; or
(ii)
acts as auditor of a company, registered scheme or registrable superannuation entity; or
(iii)
prepares a report required by this Act to be prepared by a registered company auditor or by an auditor of a company, registered scheme or registrable superannuation entity; and
(b)
at that time, the firm:
(i)
does not satisfy subsection
(5)
; or
(ii)
does not satisfy subsection
(6)
; and
(c)
the defendant is a member of the firm at that time; and
(d)
the defendant is aware of the circumstances referred to in paragraphs
(a)
and
(b)
at that time.
History
S 324BB(1) amended by No 29 of 2023, s 3, Sch 6[90] (effective 1 July 2023).
324BB(2)
A person (the
defendant
) contravenes this subsection if:
(a)
at a particular time, a firm:
(i)
consents to be appointed as auditor of a company, registered scheme or registrable superannuation entity; or
(ii)
acts as auditor of a company, registered scheme or registrable superannuation entity; or
(iii)
prepares a report required by this Act to be prepared by a registered company auditor or by an auditor of a company, registered scheme or registrable superannuation entity; and
(b)
at that time, the firm:
(i)
does not satisfy subsection
(5)
; or
(ii)
does not satisfy subsection
(6)
; and
(c)
the defendant is a member of the firm at that time.
History
S 324BB(2) amended by No 29 of 2023, s 3, Sch 6[91] (effective 1 July 2023).
324BB(3)
For the purposes of an offence based on subsection
(2)
, strict liability applies to the physical elements of the offence specified in paragraphs
(2)(a)
and
(b)
.
Note 1: For
strict liability
, see section 6.1 of the
Criminal Code
.
Note 2: Subsection (4) provides a defence.
324BB(4)
A member of an audit firm does not commit an offence at a particular time because of a contravention of subsection
(2)
if the member either:
(a)
does not know at that time of the circumstances that constitute the contravention of subsection
(2)
; or
(b)
does know of those circumstances at that time but takes all reasonable steps to correct the contravention as soon as possible after the member becomes aware of those circumstances.
Note: A defendant bears an evidential burden in relation to the matters in this subsection, see subsection
13.3(3)
of the
Criminal Code
.
Registered company auditor requirement
324BB(5)
The firm satisfies this subsection if at least 1 member of the firm is a registered company auditor who is ordinarily resident in Australia or New Zealand.
History
S 324BB(5) amended by No 127 of 2021, s 3, Sch 3[1] (effective 8 December 2021).
Business name or members names requirement
324BB(6)
The firm satisfies this subsection if:
(a)
the business name under which the firm is carrying on business is registered on the Business Names Register; or
(b)
a return in the prescribed form has been lodged showing, in relation to each member of the firm, the member
'
s full name and address as at the time when the firm so consents, acts or prepares a report.
[
CCH Note:
S 324BB(6) will be amended by No 69 of 2020, s 3, Sch 1[621] and
[
622], by substituting
"
under section 24 of the
Business Names Registration Act 2011
"
for
"
on the Business Names Register
"
in para (a) and
"
that meets any requirements of the data standards
"
for
"
in the prescribed form
"
in para (b) (effective 1 July 2026 or a day or days to be fixed by Proclamation).]
History
S 324BB(6) amended by No 127 of 2011, s 3, Sch 2, Pt 1[18].
[
CCH Note:
The
Business Names Registration (Application of Consequential Amendments) Act 2011
(Act No 172 of 2011), s 3, Sch 1[4] contained the following application provision:
Application of amendments to the
Corporations Act 2001
(1) The amendments made by items 15, 16, 17 and 19 of Schedule 2 to the
Business Names Registration (Transitional and Consequential Provisions) Act 2011
(Act No 127 of 2011) apply in relation to the availability of names on or after the change-over day.
[
CCH Note:
change-over day
means the day on which Part 2 of the
Business Names Registration Act 2011
(Act No 126 of 2011) commences, ie 28 May 2012.]
(2) The amendments made by items 18 and 20 of Schedule 2 to the
Business Names Registration (Transitional and Consequential Provisions) Act 2011
(Act No 127 of 2011) apply in relation to things done on or after the change-over day.]
History
S 324BB inserted by No 103 of 2004, s 3, Sch 1, Pt 3
[
95].
SECTION 324BC
REGISTRATION REQUIREMENTS FOR APPOINTMENT OF COMPANY AS AUDITOR
Contravention by company
324BC(1)
A company contravenes this subsection if:
(a)
the company:
(i)
consents to be appointed as auditor of a company, registered scheme or registrable superannuation entity; or
(ii)
acts as auditor of a company, registered scheme or registrable superannuation entity; or
(iii)
prepares a report required by this Act to be prepared by a registered company auditor or by an auditor of a company, registered scheme or registrable superannuation entity; and
(b)
the company is not an authorised audit company.
History
S 324BC(1) amended by No 29 of 2023, s 3, Sch 6[92] (effective 1 July 2023).
Contraventions by directors of company
324BC(2)
A person (the
defendant
) contravenes this subsection if:
(a)
at a particular time, a company:
(i)
consents to be appointed as auditor of a company, registered scheme or registrable superannuation entity; or
(ii)
acts as auditor of a company, registered scheme or registrable superannuation entity; or
(iii)
prepares a report required by this Act to be prepared by a registered company auditor or by an auditor of a company, registered scheme or registrable superannuation entity; and
(b)
at that time, the company is not an authorised audit company; and
(c)
the defendant is a director of the company at that time; and
(d)
the defendant is aware of the circumstances referred to in paragraphs
(a)
and
(b)
at that time.
History
S 324BC(2) amended by No 29 of 2023, s 3, Sch 6[93] (effective 1 July 2023).
324BC(3)
A person (the
defendant
)contravenes this subsection if:
(a)
at a particular time, a company:
(i)
consents to be appointed as auditor of a company, registered scheme or registrable superannuation entity; or
(ii)
acts as auditor of a company, registered scheme or registrable superannuation entity; or
(iii)
prepares a report required by this Act to be prepared by a registered company auditor or by an auditor of a company, registered scheme or registrable superannuation entity; and
(b)
at that time, the company is not an authorised audit company; and
(c)
the defendant is a director of the company at that time.
History
S 324BC(3) amended by No 29 of 2023, s 3, Sch 6[94] (effective 1 July 2023).
324BC(4)
For the purposes of an offence based on subsection
(3)
, strict liability applies to the physical elements of the offence specified in paragraphs
(3)(a)
and
(b)
.
Note 1: For
strict liability
, see section 6.1 of the
Criminal Code
.
Note 2: Subsection
(5)
provides a defence.
324BC(5)
A director of a company does not commit an offence at a particular time because of a contravention of subsection
(3)
if the director either:
(a)
does not know at that time of the circumstances that constitute the contravention of subsection
(3)
; or
(b)
knows of those circumstances at that time but takes all reasonable steps to correct the contravention of subsection
(3)
as soon as possible after the director becomes aware of those circumstances.
Note: A defendant bears an evidential burden in relation to the matters in this subsection, see subsection 13.3(3) of the
Criminal Code
.
History
S 324BC inserted by No 103 of 2004, s 3, Sch 1, Pt 3
[
95].
SECTION 324BD
EXCEPTION FROM REGISTRATION REQUIREMENT FOR PROPRIETARY COMPANY
324BD(1)
[
Appointment]
An individual who is not a registered company auditor may be appointed as auditor of a proprietary company if:
(a)
ASIC is satisfied that it is impracticable for a proprietary company to obtain the services of:
(i)
an individual who could be appointed as auditor consistently with section
324BA
; or
(ii)
a firm that could be appointed as auditor consistently with section
324BB
; or
(iii)
a company that could be appointed consistently with section
324BC
;
because of the place where the company carries on business; and
(b)
ASIC is satisfied that the individual is suitably qualified or experienced; and
(c)
ASIC approves the individual for the purposes of this Act in relation to the audit of the company's financial reports.
The appointment is subject to such terms and conditions as are specified in the approval under paragraph (c).
324BD(2)
[
Deemed registered company auditor]
If an individual is appointed in accordance with subsection (1):
(a)
the individual is taken to be a registered company auditor in relation to the auditing of any of the company's financial reports; and
(b)
the provisions of this Act apply, with the necessary modifications, in relation to the individual accordingly.
Paragraph (a) has effect subject to the terms and conditions of the approval under subsection (1).
324BD(3)
[
Amend, vary, etc, approval]
If an individual approved by ASIC under subsection (1) is acting as auditor of a company, ASIC may at any time, by notice in writing given to the company:
(a)
amend, revoke or vary the terms and conditions of its approval; or
(b)
terminate the appointment of that individual as auditor of the company.
324BD(4)
[
Date of effect of termination of appointment]
A notice under subsection (3) terminating the appointment of an individual as auditor of a company takes effect as if, on the date on which the notice is received by the company, the company had received from the individual notice of the individual's resignation as auditor taking effect from that date.
History
S 324BD inserted by No 103 of 2004, s 3, Sch 1, Pt 3
[
95] (effective 1 July 2004).
SECTION 324BE
EXCEPTION FROM REGISTRATION REQUIREMENT
-
REVIEWING FINANCIAL REPORTS OF COMPANIES LIMITED BY GUARANTEE
324BE(1)
[
Deemed registered company auditor]
An individual is taken to be a registered company auditor for the purposes of a review of a financial report of a company limited by guarantee if the individual:
(a)
is a member of a professional accounting body; and
(b)
has a designation, in respect of that membership, prescribed by the regulations for the purposes of this paragraph.
History
S 324BE(1) amended by No 169 of 2012, s 3, Sch 3, Pt 3[32] (effective 1 July 2013).
324BE(2)
[
Application of provisions with necessary modifications]
The provisions of this Act apply, with the necessary modifications, in relation to the individual accordingly.
History
S 324BE inserted by No 66 of 2010, s 3, Sch 1, Pt 1
[
45] (effective 28 June 2010).
Division 2A
-
Eligibility requirements for auditors of registrable superannuation entities
History
Div 2A inserted by No 29 of 2023, s 3, Sch 6[95] (effective 1 July 2023).
SECTION 324BF
ELIGIBILITY REQUIREMENTS FOR AUDITORS OF REGISTRABLE SUPERANNUATION ENTITIES
324BF(1)
An individual contravenes this section if:
(a)
the individual:
(i)
consents to be appointed as auditor of a registrable superannuation entity for the purposes of this Chapter; or
(ii)
acts as auditor of a registrable superannuation entity for the purposes of this Chapter; or
(iii)
prepares a report required by this Act to be prepared by an auditor of a registrable superannuation entity; and
(b)
the person:
(i)
does not meet the eligibility criteria for auditors of registrable superannuation entities (within the meaning of the
Superannuation Industry (Supervision) Act 1993
) set out in the prudential standards (within the meaning of that Act); or
(ii)
has been disqualified from being, or acting as, an auditor of a registrable superannuation entity (within the meaning of the
Superannuation Industry (Supervision) Act 1993
) under section
130D
of that Act; or
(iii)
is a member or employee of a firm that is disqualified under section
130EA
of the
Superannuation Industry (Supervision) Act 1993
; or
(iv)
is a director or employee of a company that is disqualified under section
130EA
of the
Superannuation Industry (Supervision) Act 1993
.
324BF(2)
A company contravenes this section if:
(a)
the company:
(i)
consents to be appointed as auditor of a registrable superannuation entity for the purposes of this Chapter; or
(ii)
acts as auditor of a registrable superannuation entity for the purposes of this Chapter; or
(iii)
prepares a report required by this Act to be prepared by an auditor of a registrable superannuation entity; and
(b)
the company is disqualified under section
130EA
of the
Superannuation Industry (Supervision) Act 1993
.
324BF(3)
A member of a firm contravenes this section if:
(a)
the firm:
(i)
consents to be appointed as auditor of a registrable superannuation entity for the purposes of this Chapter; or
(ii)
acts as auditor of a registrable superannuation entity for the purposes of this Chapter; or
(iii)
prepares a report required by this Act to be prepared by an auditor of a registrable superannuation entity; and
(b)
the firm is disqualified under section
130EA
of the
Superannuation Industry (Supervision) Act 1993
.
324BF(4)
A company contravenes this section if:
(a)
the company:
(i)
consents to be appointed as auditor of a registrable superannuation entity for the purposes of this Chapter; or
(ii)
acts as auditor of a registrable superannuation entity for the purposes of this Chapter; or
(iii)
prepares a report required by this Act to be prepared by an auditor of a registrable superannuation entity; and
(b)
the lead auditor for an audit of a registrable superannuation entity conducted by the company:
(i)
does not meet the eligibility criteria for auditors of registrable superannuation entities (within the meaning of the
Superannuation Industry (Supervision) Act 1993
) set out in the prudential standards (within the meaning of that Act); or
(ii)
has been disqualified from being, or acting as, an auditor of a registrable superannuation entity (within the meaning of the
Superannuation Industry (Supervision) Act 1993
) under section
130D
of that Act.
324BF(5)
A member of a firm contravenes this section if:
(a)
the firm:
(i)
consents to be appointed as auditor of a registrable superannuation entity for the purposes of this Chapter; or
(ii)
acts as auditor of a registrable superannuation entity for the purposes of this Chapter; or
(iii)
prepares a report required by this Act to be prepared by an auditor of a registrable superannuation entity; and
(b)
the lead auditor for an audit of a registrable superannuation entity conducted by the firm:
(i)
does not meet the eligibility criteria for auditors of registrable superannuation entities (within the meaning of the
Superannuation Industry (Supervision) Act 1993
) set out in the prudential standards (within the meaning of that Act); or
(ii)
has been disqualified from being, or acting as, an auditor of a registrable superannuation entity (within the meaning of the
Superannuation Industry (Supervision) Act 1993
) under section
130D
of that Act.
History
S 324BF inserted by No 29 of 2023, s 3, Sch 6[95] (effective 1 July 2023).
Division 3
-
Auditor independence
History
Div 3 inserted by No 103 of 2004, s 3, Sch 1, Pt 3
[
95] (effective 1 July 2004).
Subdivision A
-
General requirement
SECTION 324CA
GENERAL REQUIREMENT FOR AUDITOR INDEPENDENCE
-
AUDITORS
Contravention by individual auditor or audit company
324CA(1)
An individual auditor or audit company contravenes this subsection if:
(a)
the individual auditor or audit company engages in audit activity in relation to an audited body at a particular time; and
(b)
a conflict of interest situation exists in relation to the audited body at that time; and
(c)
at that time:
(i)
in the case of an individual auditor
-
the individual auditor is aware that the conflict of interest situation exists; or
(ii)
in the case of an audit company
-
the audit company is aware that the conflict of interest situation exists; and
(d)
the individual auditor or audit company does not, as soon as possible after the individual auditor or the audit company becomes aware that the conflict of interest situation exists, take all reasonable steps to ensure that the conflict of interest situation ceases to exist.
Note: For
conflict of interest situation
, see section
324CD
.
History
S 324CA(1) inserted by No 103 of 2004, s 3, Sch 1, Pt 3
[
95].
Individual auditor or audit company to notify ASIC
324CA(1A)
An individual auditor or audit company contravenes this subsection if:
(a)
the individual auditor or audit company is the auditor of an audited body; and
(b)
a conflict of interest situation exists in relation to the audited body while the individual auditor or audit company is the auditor of the audited body; and
(c)
on a particular day (the
start day
):
(i)
in the case of an individual auditor
-
the individual auditor becomes aware that the conflict of interest situation exists; or
(ii)
in the case of an audit company
-
the audit company becomes aware that the conflict of interest situation exists; and
(d)
at the end of the period of 7 days from the start day:
(i)
the conflict of interest situation remains in existence; and
(ii)
the individual auditor or audit company has not informed ASIC in writing that the conflict of interest situation exists.
Note 1: For
conflict of interest situation
, see section
324CD
.
Note 2: If the audited body is a public company, a registered scheme or a registrable superannuation entity, the audit appointment will be terminated at the end of the period of 21 days (or a longer period that has been approved by ASIC) from the day a notice under this subsection is given if the notice is not followed up by a notice under:
(a) subsection
327B(2A)
or
(2C)
(public company); or
(b) subsection
328E(3)
or
(5)
(public company with crowd-sourced funding); or
(c) subsection
331AAA(2A)
or
(2C)
(registered scheme); or
(d) subsection
331AH(3)
or
(5)
(registrable superannuation entity).
History
S 324CA(1A) amended by No 29 of 2023, s 3, Sch 6[96] and
[
97] (effective 1 July 2023).
S 324CA(1A) (Note 2) substituted by No 17 of 2017, s 3, Sch 2
[
10].
S 324CA(1A) (Note 2) amended by No 101 of 2007, s 3, Sch 1, Pt 1
[
45].
S 324CA(1A) inserted by No 103 of 2004, s 3, Sch 1, Pt 3
[
95].
324CA(1B)
A person is not excused from informing ASIC under subsection
(1A)
that a conflict of interest situation exists on the ground that the information might tend to incriminate the person or expose the person to a penalty.
History
S 324CA(1B) inserted by No 103 of 2004, s 3, Sch 1, Pt 3
[
95].
324CA(1C)
However, if the person is a natural person:
(a)
the information; and
(b)
the giving of the information;
are not admissible in evidence against the person in a criminal proceeding, or any other proceeding for the recovery of a penalty, other than proceedings for an offence based on the information given being false or misleading.
History
S 324CA(1C) inserted by No 103 of 2004, s 3, Sch 1, Pt 3
[
95].
324CA(1D)
If the individual auditor or audit company gives ASIC a notice under paragraph
(1A)(d)
, ASIC must, as soon as practicable after the notice has been received, give a copy of the notice to the audited body.
History
S 324CA(1D) inserted by No 103 of 2004, s 3, Sch 1, Pt 3
[
95].
Conflict of interest situation of which individual auditor or audit company is not aware
324CA(2)
An individual auditor or audit company contravenes this subsection if:
(a)
the individual auditor or audit company engages in audit activity in relation to an audited body at a particular time; and
(b)
a conflict of interest situation exists in relation to the audited body at the time; and
(c)
at that time:
(i)
in the case of an individual auditor
-
the individual auditor is not aware that the conflict of interest situation exists; or
(ii)
in the case of an audit company
-
the audit company is not aware that the conflict of interest situation exists; and
(d)
the individual auditor or the audit company would have been aware of the existence of the conflict of interest situation at that time if the individual auditor or audit company had had in place a quality control system reasonably capable of making the individual auditor or audit company aware of the existence of such a conflict of interest situation.
Note: For
conflict of interest situation
, see section
324CD
.
History
S 324CA(2) inserted by No 103 of 2004, s 3, Sch 1, Pt 3
[
95].
324CA(3)
For the purposes of an offence based on subsection
(2)
, strict liability applies to the physical element of the offence specified in paragraph
(2)(b)
.
Note 1: For
strict liability
, see section 6.1 of the
Criminal Code
.
Note 2: Subsections
(4)
and
(5)
provide defences.
History
S 324CA(3) inserted by No 103 of 2004, s 3, Sch 1, Pt 3
[
95].
324CA(4)
An individual auditor does not commit an offence because of a contravention of subsection
(2)
in relation to audit activity engaged in by the auditor at a particular time if theindividual auditor has reasonable grounds to believe that the individual auditor had in place at that time a quality control system that provided reasonable assurance (taking into account the size and nature of the audit practice of the individual auditor) that the individual auditor and the individual auditor
'
s employees complied with the requirements of this Subdivision.
Note: A defendant bears an evidential burden in relation to the matters in this subsection, see subsection 13.3(3) of the
Criminal Code
.
History
S 324CA(4) inserted by No 103 of 2004, s 3, Sch 1, Pt 3
[
95].
324CA(5)
An audit company does not commit an offence because of a contravention of subsection
(2)
in relation to audit activity engaged in by the audit company at a particular time if the audit company has reasonable grounds to believe that the audit company had in place at that time a quality control system that provided reasonable assurance (taking into account the size and nature of the audit practice of the audit company) that the audit company and the audit company
'
s employees complied with the requirements of this Subdivision.
Note: A defendant bears an evidential burden in relation to the matters in this subsection, see subsection 13.3(3) of the
Criminal Code
.
History
S 324CA(5) inserted by No 103 of 2004, s 3, Sch 1, Pt 3
[
95].
Relationship between obligations under this section and other obligations
324CA(6)
The obligations imposed by this section are in addition to, and do not derogate from, any obligation imposed by:
(a)
another provision of this Act; or
(b)
a code of professional conduct.
Note: Paragraph
(a)
-
see, for example, the specific obligations imposed by Subdivision
B
.
History
S 324CA(6) inserted by No 103 of 2004, s 3, Sch 1, Pt 3
[
95].
SECTION 324CB
GENERAL REQUIREMENT FOR AUDITOR INDEPENDENCE
-
MEMBER OF AUDIT FIRM
Contravention by member of audit firm
324CB(1)
A person (the
defendant
) contravenes this subsection if:
(a)
an audit firm engages in audit activity in relation to an audited body at a particular time; and
(b)
a conflict of interest situation exists in relation to the audited body at that time; and
(c)
the defendant is a member of the audit firm at that time; and
(d)
the defendant is or becomes aware of the circumstances referred to in paragraphs
(a)
and
(b)
; and
(e)
the defendant does not, as soon as possible after the defendant becomes aware of those circumstances, take reasonable steps to ensure that the conflict of interest situation ceases to exist.
Note: For
conflict of interest situation
, see section
324CD
.
History
S 324CB(1) inserted by No 103 of 2004, s 3, Sch 1, Pt 3
[
95].
Member of audit firm to notify ASIC
324CB(1A)
A person (the
defendant
) contravenes this subsection if:
(a)
an audit firm is the auditor of an audited body; and
(b)
a conflict of interest situation exists in relation to the audited body while the audit firm is the auditor of the audited body; and
(c)
the defendant is a member of the audit firm at a time when the conflict of interest situation exists; and
(d)
on a particular day (the
start day
), the defendant becomes aware of the circumstances referred to in paragraphs
(a)
and
(b)
; and
(e)
at the end of the period of 7 days from the start day:
(i)
the conflict of interest situation remains in existence; and
(ii)
ASIC has not been informed in writing by the defendant, by another member of the audit firm or by someone else on behalf of the audit firm that the conflict of interest situation exists.
Note 1: For
conflict of interest situation
, see section
324CD
.
Note 2: If the audited body is a public company, a registered scheme or a registrable superannuation entity, the audit appointment will be terminated at the end of the period of 21 days (or a longer period that has been approved by ASIC) from the day a notice under this subsection is given if the notice is not followed up by a notice under:
(a) subsection
327B(2B)
(public company); or
(b) subsection
328E(4)
(public company with crowd-sourced funding); or
(c) subsection
331AAA(2B)
(registered scheme); or
(d) subsection
331AH(4)
(registrable superannuation entity).
History
S 324CB(1A) amended by No 29 of 2023, s 3, Sch 6[98] and
[
99] (effective 1 July 2023).
S 324CB(1A) (Note 2) substituted by No 17 of 2017, s 3, Sch 2
[
11].
S 324CB(1A) (Note 2) amended by No 101 of 2007, s 3, Sch 1, Pt 1
[
45].
S 324CB(1A) inserted by No 103 of 2004, s 3, Sch 1, Pt 3
[
95].
324CB(1B)
A person is not excused from informing ASIC under subsection
(1A)
that a conflict of interest situation exists on the ground that the information might tend to incriminate the person or expose the person to a penalty.
History
S 324CB(1B) inserted by No 103 of 2004, s 3, Sch 1, Pt 3
[
95].
324CB(1C)
However:
(a)
the information; and
(b)
the giving of the information;
are not admissible in evidence against the person in a criminal proceeding, or any other proceeding for the recovery of a penalty, other than proceedings for an offence based on the information given being false or misleading.
History
S 324CB(1C) inserted by No 103 of 2004, s 3, Sch 1, Pt 3
[
95].
324CB(1D)
If ASIC is given a notice under paragraph
(1A)(e)
, ASIC must, as soon as practicable after the notice is received, give a copy of the notice to the audited body.
History
S 324CB(1D) inserted by No 103 of 2004, s 3, Sch 1, Pt 3
[
95].
Conflict of interest situation of which another member of audit firm is aware
324CB(2)
A person contravenes this subsection if:
(a)
an audit firm engages in audit activity in relation to an audited body at a particular time; and
(b)
a conflict of interest situation exists in relation to the audited body at the time; and
(c)
the person is a member of the audit firm at that time; and
(d)
at that time, another member of the audit firm is aware that the conflict of interest situation exists; and
(e)
the audit firm does not, as soon as possible after the member referred to in paragraph
(d)
becomes aware that the conflict of interest situation exists, take all reasonable steps to ensure that the conflict of interest situation ceases to exist.
Note: For
conflict of interest situation
, see section
324CD
.
History
S 324CB(2) inserted by No 103 of 2004, s 3, Sch 1, Pt 3
[
95].
324CB(3)
For the purposes of an offence based on subsection
(2)
, strict liability applies to the physical elements of the offence specified in paragraphs
(2)(a)
,
(b)
,
(d)
and
(e)
.
Note 1: For
strict liability
, see section 6.1 of the
Criminal Code
.
Note 2: Subsection
(6)
provides a defence.
History
S 324CB(3) inserted by No 103 of 2004, s 3, Sch 1, Pt 3
[
95].
Conflict of interest situation of which members are not aware
324CB(4)
A person contravenes this subsection if:
(a)
an audit firm engages in audit activity in relation to an audited body at a particular time; and
(b)
a conflict of interest situation exists in relation to the audited body at the time; and
(c)
the person is a member of the audit firm at that time; and
(d)
at that time none of the members of the audit firm is aware that the conflict of interest situation exists; and
(e)
a member of the audit firm would have been aware of the existence of the conflict of interest situation if the audit firm had in place a quality control system reasonably capable of making the audit firm aware of the existence of such a conflict of interest situation.
Note: For
conflict of interest situation
, see section
324CD
.
History
S 324CB(4) inserted by No 103 of 2004, s 3, Sch 1, Pt 3
[
95].
324CB(5)
For the purposes of an offence based on subsection
(4)
, strict liability applies to the physical elements of the offence specified in paragraphs
(4)(a)
,
(b)
,
(d)
and
(e)
.
Note 1: For
strict liability
, see section 6.1 of the
Criminal Code
.
Note 2: Subsection
(6)
provides a defence.
History
S 324CB(5) inserted by No 103 of 2004, s 3, Sch 1, Pt 3
[
95].
Defence
324CB(6)
A person does not commit an offence because of a contravention of subsection
(2)
or
(4)
in relation to audit activity engaged in by an audit firm at a particular time if the person has reasonable grounds to believe that the audit firm had in place at that time a quality control system that provided reasonable assurance (taking into account the size and nature of the audit practice of the audit firm) that the audit firm and its employees complied with the requirements of this Subdivision.
Note: A defendant bears an evidential burden in relation to the matters in this subsection, see subsection 13.3(3) of the
Criminal Code
.
History
S 324CB(6) inserted by No 103 of 2004, s 3, Sch 1, Pt 3
[
95].
Relationship between obligations under this section and other obligations
324CB(7)
The obligations imposed by this section are in addition to, and do not derogate from, any obligation imposed by:
(a)
another provision of this Act; or
(b)
a code of professional conduct.
Note: Paragraph
(a)
-
see, for example, the specific obligations imposed by Subdivision
B
.
History
S 324CB(7) inserted by No 103 of 2004, s 3, Sch 1, Pt 3
[
95].
SECTION 324CC
GENERAL REQUIREMENT FOR AUDITOR INDEPENDENCE
-
DIRECTOR OF AUDIT COMPANY
Contravention by director of audit company
324CC(1)
A person (the
defendant
) contravenes this subsection if:
(a)
an audit company engages in audit activity in relation to an audited body at a particular time; and
(b)
a conflict of interest situation exists in relation to the audited body at that time; and
(c)
the defendant is a director of the audit company at that time; and
(d)
the defendant is or becomes aware of the circumstances referred to in paragraphs
(a)
and
(b)
; and
(e)
the defendant does not, as soon as possible after the defendant becomes aware of those circumstances, take reasonable steps to ensure that the conflict of interest situation ceases to exist.
Note 1: For
conflict of interest situation
, see section
324CD
.
Note 2: The audit company itself will commit an offence based on the contravention of subsection
324AA(1)
.
History
S 324CC(1) inserted by No 103 of 2004, s 3, Sch 1, Pt 3
[
95].
Director of audit company to notify ASIC
324CC(1A)
A person (the
defendant
) contravenes this subsection if:
(a)
an audit company is the auditor of an audited body; and
(b)
a conflict of interest situation exists in relation to the audited body while the audit company is the auditor of the audited body; and
(c)
the defendant is a director of the audit company at a time when the conflict of interest situation exists; and
(d)
on a particular day (the
start day
), the defendant becomes aware of the circumstances referred to in paragraphs
(a)
and
(b)
; and
(e)
at the end of the period of 7 days from the start day:
(i)
the conflict of interest situation remains in existence; and
(ii)
ASIC has not been informed in writing by the defendant, by another director of the audit company or by the audit company that the conflict of interest situation exists.
Note 1: For
conflict of interest situation
, see section
324CD
.
Note 2: If the audited body is a public company, a registered scheme or a registrable superannuation entity, the audit appointment will be terminated at the end of the period of 21 days (or a longer period that has been approved by ASIC) from the day a notice under this subsection is given if the notice is not followed up by a notice under:
(a) subsection
327B(2C)
(public company); or
(b) subsection
328E(5)
(public company with crowd-sourced funding); or
(c) subsection
331AAA(2C)
(registered scheme); or
(d) subsection
331AH(5)
(registrable superannuation entity).
History
S 324CC(1A) amended by No 29 of 2023, s 3, Sch 6[100] and
[
101] (effective 1 July 2023).
S 324CC(1A) (Note 2) substituted by No 17 of 2017, s 3, Sch 2
[
12].
S 324CC(1A) (Note 2) amended by No 101 of 2007, s 3, Sch 1, Pt 1
[
45].
S 324CC(1A) inserted by No 103 of 2004, s 3, Sch 1, Pt 3
[
95].
324CC(1B)
A person is not excused from informing ASIC under subsection
(1A)
that a conflict of interest situation exists on the ground that the information might tend to incriminate the person or expose the person to a penalty.
History
S 324CC(1B) inserted by No 103 of 2004, s 3, Sch 1, Pt 3
[
95].
324CC(1C)
However, if the person is a natural person:
(a)
the information; and
(b)
the giving of the information;
are not admissible in evidence against the person in a criminal proceeding, or any other proceeding for the recovery of a penalty, other than proceedings for an offence based on the information given being false or misleading.
History
S 324CC(1C) inserted by No 103 of 2004, s 3, Sch 1, Pt 3
[
95].
324CC(1D)
If ASIC is given a notice under paragraph
(1A)(e)
, ASIC must, as soon as practicable after the notice is received, give a copy of the notice to the audited body.
History
S 324CC(1D) inserted by No 103 of 2004, s 3, Sch 1, Pt 3
[
95].
Conflict of interest situation of which another director of audit company aware
324CC(2)
A person contravenes this subsection if:
(a)
an audit company engages in audit activity in relation to an audited body at a particular time; and
(b)
a conflict of interest situation exists in relation to the audited body at the time; and
(c)
the person is a director of the audit company at that time; and
(d)
at that time, another director of the audit company is aware that the conflict of interest situation exists; and
(e)
the audit company does not, as soon as possible after the director referred to in paragraph
(d)
becomes aware that the conflict of interest situation exists, take all reasonable steps to ensure that the conflict of interest situation ceases to exist.
Note 1: For
conflict of interest situation
, see section
324CD
.
Note 2: The company itself will commit an offence based on the contravention of subsection
324AA(1)
.
History
S 324CC(2) inserted by No 103 of 2004, s 3, Sch 1, Pt 3
[
95].
324CC(3)
For the purposes of an offence based on subsection
(2)
, strict liability applies to the physical elements of the offence specified in paragraphs
(2)(a)
,
(b)
,
(d)
and
(e)
.
Note 1: For
strict liability
, see section 6.1 of the
Criminal Code
.
Note 2: Subsection
(6)
provides a defence.
History
S 324CC(3) inserted by No 103 of 2004, s 3, Sch 1, Pt 3
[
95].
Conflict of interest situation of which directors of audit company not aware
324CC(4)
A person contravenes this subsection if:
(a)
an audit company engages in audit activity in relation to an audited body at a particular time; and
(b)
a conflict of interest situation exists in relation to the audited body at the time; and
(c)
the person is a director of the audit company at that time; and
(d)
at that time none of the directors of the audit company is aware that the conflict of interest situation exists; and
(e)
a director of the audit company would have been aware of the existence of the conflict of interest situation if the audit company had in place a quality control system reasonably capable of making the audit company aware of the existence of such a conflict of interest situation.
Note 1: For
conflict of interest situation
, see section
324CD
.
Note 2: The company itself will commit an offence based on the contravention of subsection
324AA(2)
.
History
S 324CC(4) inserted by No 103 of 2004, s 3, Sch 1, Pt 3
[
95].
324CC(5)
For the purposes of an offence based on subsection
(4)
, strict liability applies to the physical elements of the offence specified in paragraphs
(4)(a)
,
(b)
,
(d)
and
(e)
.
Note 1: For
strict liability
, see section 6.1 of the
Criminal Code
.
Note 2: Subsection
(6)
provides a defence.
History
S 324CC(5) inserted by No 103 of 2004, s 3, Sch 1, Pt 3
[
95].
Defence
324CC(6)
A person does not commit an offence because of a contravention of subsection
(2)
or
(4)
in relation to audit activity engaged in by an audit company at a particular time if the person has reasonable grounds to believe that the audit company had in place at that time a quality control system that provided reasonable assurance (taking into account the size and nature of the audit practice of the audit company) that the audit company and its employees complied with the requirements of this Subdivision.
Note: A defendant bears an evidential burden in relation to the matters in this subsection, see subsection 13.3(3) of the
Criminal Code
.
History
S 324CC(6) inserted by No 103 of 2004, s 3, Sch 1, Pt 3
[
95].
Relationship between obligations under this section and other obligations
324CC(7)
The obligations imposed by this section are in addition to, and do not derogate from, any obligation imposed by:
(a)
another provision of this Act; or
(b)
a code of professional conduct.
Note: Paragraph
(a)
-
see, for example, the specific obligations imposed by Subdivision
B
.
History
S 324CC(7) inserted by No 103 of 2004, s 3, Sch 1, Pt 3
[
95].
SECTION 324CD
CONFLICT OF INTEREST SITUATION
324CD(1)
For the purposes of sections
324CA
,
324CB
and
324CC
, a
conflict of interest situation
exists in relation to an audited body at a particular time if, because of circumstances that exist at that time:
(a)
the auditor, or a professional member of the audit team, is not capable of exercising objective and impartial judgment in relation to the conduct of the audit of the audited body; or
(b)
a reasonable person, with full knowledge of all relevant facts and circumstances, would conclude that the auditor, or a professional member of the audit team, is not capable of exercising objective and impartial judgment in relation to the conduct of the audit of the audited body.
324CD(2)
Without limiting subsection
(1)
, have regard to circumstances arising from any relationship that exists, has existed, or is likely to exist, between:
(a)
the individual auditor; or
(b)
the audit firm or any current or former member of the firm; or
(c)
the audit company, any current or former director of the audit company or any person currently or formerly involved in the management of the audit company;
and any of the persons and bodies set out in the following table:
Table for relevant relationships
Table for relevant relationships
Relevant relationships
|
Item
|
If the audited body is...
|
have regard to any relationship with...
|
1 |
a company |
the company; or
a current or former director of the company; or
a person currently or formerly involved in the management of the company. |
2 |
a disclosing entity |
the entity; or
a current or former director of the entity; or
a person currently or formerly involved in the management of the entity. |
3 |
a registered scheme |
the responsible entity for the registered scheme; or
a current or former director of the responsible entity; or
a person currently or formerly involved in the management of the scheme; or
a person currently or formerly involved in the management of the responsible entity. |
4 |
a registrable superannuation entity |
the RSE licensee for the registrable superannuation entity, if the RSE licensee is a body corporate or a constitutional corporation (within the meaning of the
Superannuation Industry (Supervision) Act 1993
); or
a current or former director of the registrable superannuation entity; or
a person currently or formerly involved in the management of the registrable superannuation entity; or
a person currently or formerly involved in the management of the RSE licensee for the registrable superannuation entity; or
a connected entity (within the meaning of the
Superannuation Industry (Supervision) Act 1993
) of the RSE licensee for the registrable superannuation entity. |
Note: This subsection applies in relation to retail CCIVs in a modified form: see section
1232N
.
History
S 324CD(2) amended by No 29 of 2023, s 3, Sch 6[102] (effective 1 July 2023).
S 324CD(2) amended by No 8 of 2022, s 3, Sch 2[132] (effective 1 July 2022).
S 324CD inserted by No 103 of 2004, s 3, Sch 1, Pt 3
[
95].
Subdivision B
-
Specific requirements
Note: This Subdivision applies in relation to retail CCIVs in a modified form: see section
1232P
.
History
Subdiv B amended by No 8 of 2022, s 3, Sch 2[133] (effective 1 July 2022).
SECTION 324CE
AUDITOR INDEPENDENCE
-
SPECIFIC REQUIREMENTS FOR INDIVIDUAL AUDITOR
Specific independence requirements for individual auditor
324CE(1)
An individual auditor contravenes this subsection if:
(a)
the individual auditor engages in audit activity at a particular time; and
(b)
a relevant item of the table in subsection
324CH(1)
applies at that time to a person or entity covered by subsection
(5)
of this section; and
(c)
the individual auditor is or becomes aware of the circumstances referred to in paragraph
(b)
; and
(d)
the individual auditor does not, as soon as possible after the individual auditor becomes aware of those circumstances, take all reasonable steps to ensure that the individual auditor does not continue to engage in audit activity in those circumstances.
History
S 324CE(1) inserted by No 103 of 2004, s 3, Sch 1, Pt 3
[
95].
Individual auditor to notify ASIC
324CE(1A)
An individual auditor contravenes this subsection if:
(a)
the individual auditor is the auditor of an audited body; and
(b)
a relevant item of the table in subsection
324CH(1)
applies to a person or entity covered by subsection
(5)
of this section while the individual auditor isthe auditor of the audited body; and
(c)
on a particular day (the
start day
), the individual auditor becomes aware of the circumstances referred to in paragraph
(b)
; and
(d)
at the end of the period of 7 days from the start day:
(i)
those circumstances remain in existence; and
(ii)
the individual auditor has not informed ASIC in writing of those circumstances.
Note: If the audited body is a public company, a registered scheme or a registrable superannuation entity, the audit appointment will be terminated at the end of the period of 21 days (or a longer period that has been approved by ASIC) from the day a notice under this subsection is given if the notice is not followed up by a notice under:
(a) subsection
327B(2A)
(public company); or
(b) subsection
328E(3)
(public company with crowd-sourced funding); or
(c) subsection
331AAA(2A)
(registered scheme); or
(d) subsection
331AH(3)
(registrable superannuation entity).
History
S 324CE(1A) amended by No 29 of 2023, s 3, Sch 6[103] and
[
104] (effective 1 July 2023).
S 324CE(1A) (Note) substituted by No 17 of 2017, s 3, Sch 2
[
13].
S 324CE(1A) (Note) amended by No 101 of 2007, s 3, Sch 1, Pt 1
[
46].
S 324CE(1A) inserted by No 103 of 2004, s 3, Sch 1, Pt 3
[
95].
324CE(1B)
A person is not excused from informing ASIC under subsection
(1A)
that the circumstances referred to in paragraph
(1A)(b)
exist on the ground that the information might tend to incriminate the person or expose the person to a penalty.
History
S 324CE(1B) inserted by No 103 of 2004, s 3, Sch 1, Pt 3
[
95].
324CE(1C)
However:
(a)
the information; and
(b)
the giving of the information;
are not admissible in evidence against the person in a criminal proceeding, or any other proceeding for the recovery of a penalty, other than proceedings for an offence based on the information given being false or misleading.
History
S 324CE(1C) inserted by No 103 of 2004, s 3, Sch 1, Pt 3
[
95].
324CE(1D)
If the individual auditor gives ASIC a notice under paragraph
(1A)(d)
, ASIC must, as soon as practicable after the notice has been received, give a copy of the notice to the audited body.
History
S 324CE(1D) inserted by No 103 of 2004, s 3, Sch 1, Pt 3
[
95].
Strict liability contravention of specific independence requirements by individual auditor
324CE(2)
An individual auditor contravenes this subsection if:
(a)
the individual auditor engages in audit activity at a particular time; and
(b)
a relevant item of the table in subsection
324CH(1)
applies at that time to a person or entity covered by subsection
(5)
of this section.
History
S 324CE(2) inserted by No 103 of 2004, s 3, Sch 1, Pt 3
[
95].
324CE(3)
For the purposes of an offence based on subsection
(2)
, strict liability applies to the physical elements of the offence specified in paragraph
(2)(b)
.
Note 1: For
strict liability
, see section 6.1 of the
Criminal Code
.
Note 2: Subsection
(4)
provides a defence.
History
S 324CE(3) inserted by No 103 of 2004, s 3, Sch 1, Pt 3
[
95].
324CE(4)
An individual auditor does not commit an offence because of a contravention of subsection
(2)
in relation to audit activity engaged in by the individual auditor at a particular time if the individual auditor has reasonable grounds to believe that the individual auditor had in place at that time a quality control system that provided reasonable assurance (taking into account the size and nature of the audit practice of the individual auditor) that the individual auditor and the individual auditor's employees complied with the requirements of this Subdivision.
Note: A defendant bears an evidential burden in relation to the matters in this subsection, see subsection 13.3(3) of the
Criminal Code
.
History
S 324CE(4) inserted by No 103 of 2004, s 3, Sch 1, Pt 3
[
95].
People and entities covered
324CE(5)
The following table sets out:
(a)
the persons and entities covered by this subsection in relation to audit activity engaged in by an individual auditor; and
(b)
the items of the table in subsection
324CH(1)
that are the relevant items for each of those persons and entities:
Table for individual auditors
Table for individual auditors
Individual auditor
|
Item
|
For this person or entity...
|
the relevant items of the table in subsection 324CH(1) are...
|
1 |
the individual auditor |
1 to 19 |
2 |
a service company or trust acting for, or on behalf of, the individual auditor, or another entity performing a similar function |
1 to 19 |
3 |
a professional member of the audit team conducting the audit of the audited body |
1 to 6
8 to 19 |
4 |
an immediate family member of a professional member of the audit team conducting the audit of the audited body |
1 and 2
10 to 19 |
5 |
a person who is a non-audit services provider and who does not satisfy the maximum hours test in subsection
(6) |
10 to 12 |
6 |
an immediate family member of a person who is a non-audit services provider and who does not satisfy the maximum hours test in subsection
(6) |
10 to 12 |
7 |
an entity that the auditor (or a service company or trust acting for, or on behalf of, the individual auditor, or another entity performing a similar function) controls |
15 |
8 |
a body corporate in which the auditor (or a service company or trust acting for, or on behalf of, the individual auditor, or another entity performing a similar function) has a substantial holding |
15 |
9 |
a person who: |
1 and 2 |
|
|
(a) is a former professional employee of the auditor; and
(b) does not satisfy the independence test in subsection
(7) |
|
10 |
an individual who: |
1 and 2 |
|
|
(a) is the former owner of the individual auditor's business; and
(b) does not satisfy the independence test in subsection
(7) |
|
History
S 324CE(5) amended by No 101 of 2007, s 3, Sch 1, Pt 1
[
47-48].
S 324CE(5) inserted by No 103 of 2004, s 3, Sch 1, Pt 3
[
95].
[
CCH Note:
Act No 101 of 2007, Sch 1, Pt 6
[
234] contained the following application provision (which was effective 28 June 2007):
Application of items 47, 48, 50 and 52 to 59
The amendments made by items 47, 48, 50 and 52 to 59 of this Schedule apply to:
(a) an audit of the financial report for a financial year; or
(b) an audit or review of the financial report for a half-year in a financial year;
if the financial year begins on or after the day on which those items commence.
]
Maximum hours test
324CE(6)
A non-audit services provider satisfies the maximum hours test in this subsection if:
(a)
the number of hours for which the person provides services (other than services related to the conduct of an audit) to the audited body on behalf of the auditor during the period to which the audit relates does not exceed 10 hours; and
(b)
the number of hours for which the person provides services (other than services related to the conduct of an audit) to the audited body on behalf of the auditor during the 12 months immediately before the beginning of the period to which the audit relates does not exceed 10 hours.
In a prosecution for an offence based on subsection
(1)
or
(2)
, the prosecution must prove that the non-audit services provider did not satisfy the maximum hours test in this subsection.
History
S 324CE(6) inserted by No 103 of 2004, s 3, Sch 1, Pt 3
[
95].
324CE(6A)
Paragraphs
(6)(a)
and
(b)
do not apply if:
(a)
the audited body is a registrable superannuation entity; and
(b)
the services are required or permitted to be provided under the prudential standards (within the meaning of the
Superannuation Industry (Supervision) Act 1993
).
History
S 324CE(6A) inserted by No 29 of 2023, s 3, Sch 6[105] (effective 1 July 2023).
Independence test
324CE(7)
A person satisfies the independence test in this subsection in relation to an individual auditor if the person:
(a)
does not influence the operations or financial policies of the accounting and audit practice conducted by the auditor; and
(b)
does not participate, or appear to participate, in the business or professional activities of the accounting and audit practice conducted bythe auditor; and
(c)
does not have any rights against the auditor in relation to the accounting and audit practice conducted by the auditor in relation to the termination of the person
'
s former employment by the auditor; and
(d)
has no financial arrangements with the auditor in relation to the accounting and audit practice conducted by the auditor, other than:
(i)
an arrangement providing for regular payments of a fixed pre-determined dollar amount which is not dependent, directly or indirectly, on the revenues, profits or earnings of the auditor; or
(ii)
an arrangement providing for regular payments of a dollar amount where the method of calculating the dollar amount is fixed and is not dependent, directly or indirectly, on the revenues, profits or earnings of the auditor; and
(e)
without limiting paragraph
(d)
, has no financial arrangement with the auditor to receive a commission or similar payment in relation to business generated by the person for the accounting and audit practice conducted by the auditor.
In a prosecution for an offence based on subsection
(1)
or
(2)
, the prosecution must prove that the person did not satisfy the independence test in this subsection in relation to the individual auditor.
History
S 324CE(7) inserted by No 103 of 2004, s 3, Sch 1, Pt 3
[
95].
324CE(8)
In applying subsection
(7)
, disregard any rights that the person has against the auditor by way of an indemnity for, or contribution in relation to, liabilities incurred by the person when the person was an employee of the auditor or the owner of the auditor's business.
History
S 324CE(8) inserted by No 103 of 2004, s 3, Sch 1, Pt 3
[
95].
SECTION 324CF
AUDITOR INDEPENDENCE
-
SPECIFIC REQUIREMENTS FOR AUDIT FIRM
Contraventions by members of audit firm
324CF(1)
A person (the
defendant
) contravenes this subsection if:
(a)
an audit firm engages in audit activity at a particular time; and
(b)
a relevant item of the table in subsection
324CH(1)
applies at that time to a person or entity covered by subsection
(5)
of this section; and
(c)
the defendant is a member of the audit firm at that time; and
(d)
the defendant is or becomes aware of the circumstances referred to in paragraphs
(a)
and
(b)
; and
(e)
the defendant does not, as soon as possible after the defendant becomes aware of those circumstances, take all reasonable steps to ensure that the audit firm does not continue to engage in audit activity in those circumstances.
History
S 324CF(1) inserted by No 103 of 2004, s 3, Sch 1, Pt 3
[
95].
Member of audit firm to notify ASIC
324CF(1A)
A person (the
defendant
) contravenes this subsection if:
(a)
an audit firm is the auditor of an audited body; and
(b)
a relevant item of the table in subsection
324CH(1)
applies to a person or entity covered by subsection
(5)
of this section while the audit firm is the auditor of the audited body; and
(c)
the defendant is a member of the audit firm at a time when the circumstances referred to in paragraph
(b)
exist; and
(d)
on a particular day (the
start day
), the defendant becomes aware of the circumstances referred to in paragraphs
(a)
and
(b)
; and
(e)
at the end of the period of 7 days from the start day:
(i)
the circumstances referred to in paragraph
(b)
remain in existence; and
(ii)
ASIC has not been informed in writing of those circumstances by the defendant, by another member of the audit firm or by someone else on behalf of the audit firm.
Note: If the audited body is a public company, a registered scheme or a registrable superannuation entity, the audit appointment will be terminated at the end of the period of 21 days (or a longer period that has been approved by ASIC) from the day a notice under this subsection is given if the notice is not followed up by a notice under:
(a) subsection
327B(2B)
(public company); or
(b) subsection
328E(4)
(public company with crowd-sourced funding); or
(c) subsection
331AAA(2B)
(registered scheme); or
(d) subsection
331AH(4)
(registrable superannuation entity).
History
S 324CF(1A) amended by No 29 of 2023, s 3, Sch 6[106] and
[
107] (effective 1 July 2023).
S 324CF(1A) (Note) substituted by No 17 of 2017, s 3, Sch 2
[
14].
S 324CF(1A) (Note) amended by No 101 of 2007, s 3, Sch 1, Pt 1
[
49].
S 324CF(1A) inserted by No 103 of 2004, s 3, Sch 1, Pt 3
[
95].
324CF(1B)
A person is not excused from informing ASIC under subsection
(1A)
that the circumstances referred to in paragraph
(1A)(b)
exist on the ground that the information might tend to incriminate the person or expose the person to a penalty.
History
S 324CF(1B) inserted by No 103 of 2004, s 3, Sch 1, Pt 3
[
95].
324CF(1C)
However:
(a)
the information; and
(b)
the giving of the information;
are not admissible in evidence against the person in a criminal proceeding, or any other proceeding for the recovery of a penalty, other than proceedings for an offence based on the information given being false or misleading.
History
S 324CF(1C) inserted by No 103 of 2004, s 3, Sch 1, Pt 3
[
95].
324CF(1D)
If ASIC is given a notice under paragraph
(1A)(e)
, ASIC must, as soon as practicable after the notice is received, give a copy of the notice to the audited body.
History
S 324CF(1D) inserted by No 103 of 2004, s 3, Sch 1, Pt 3
[
95].
Contravention of independence requirements by members of audit firm
324CF(2)
A person (the
defendant
) contravenes this subsection if:
(a)
an audit firm engages in audit activity at a particular time; and
(b)
a relevant item of the table in subsection
324CH(1)
applies at that time to a person or entity covered by subsection
(5)
of this section; and
(c)
the defendant is a member of the audit firm at that time.
History
S 324CF(2) inserted by No 103 of 2004, s 3, Sch 1, Pt 3
[
95].
324CF(3)
For the purposes of an offence based on subsection
(2)
, strict liability applies to the physical elements of the offence specified in paragraphs
(2)(a)
and
(b)
.
Note 1: For
strict liability
, see section 6.1 of the
Criminal Code
.
Note 2: Subsection
(4)
provides a defence.
History
S 324CF(3) inserted by No 103 of 2004, s 3, Sch 1, Pt 3
[
95].
324CF(4)
A person does not commit an offence because of a contravention of subsection
(2)
in relation to audit activity engaged in by an audit firm at a particular time if the person has reasonable grounds to believe that the audit firm had in place at that time a quality control system that provided reasonable assurance (taking into account the size and nature of the audit practice of the audit firm) that the audit firm and its employees complied with the requirements of this Subdivision.
Note: A defendant bears an evidential burden in relation to the matters in this subsection, see subsection 13.3(3) of the
Criminal Code
.
History
S 324CF(4) inserted by No 103 of 2004, s 3, Sch 1, Pt 3
[
95].
People and entities covered
324CF(5)
The following table sets out:
(a)
the persons and entities covered by this subsection in relation to audit activity engaged in by an audit firm; and
(b)
the items of the table in subsection
324CH(1)
that are the relevant items for each of those persons and entities:
Table for audit firms
Table for audit firms
Audit firm
|
Item
|
For this person or entity...
|
the relevant items of the table in subsection 324CH(1) are...
|
1 |
the firm |
4
7
10 to 19 |
2 |
a service company or trust acting for, or on behalf of, the firm, or another entity performing a similar function |
4
7
10 to 19 |
3 |
a member of the firm |
1 to 7
9
15 |
4 |
a professional member of the audit team conducting the audit of the audited body |
1 to 6
8 to 19 |
5 |
an immediate family member of a professional member of the audit team conducting the audit of the audited body |
1 and 2
10 to 19 |
6 |
a person who: |
10 to 12 |
|
|
(a) is a non-audit services provider; and
(b) does not satisfy the maximum hours test in subsection
(6) |
|
7 |
an immediate family member of a person who: |
10 to 12 |
|
|
(a) is a non-audit services provider; and
(b) does not satisfy the maximum hours test in subsection
(6) |
|
8 |
an entity that the firm (or a service company or trust acting for, or on behalf of, the firm, or another entity performing a similar function) controls |
15 |
9 |
a body corporate in which the firm (or a service company or trust acting for, or on behalf of, the firm, or another entity performing a similar function) has a substantial holding |
15 |
10 |
an entity that a member of the firm controls or a body corporate in which a member of the firm has a substantial holding |
15 |
11 |
a person who: |
1 and 2 |
|
|
(a) is a former member of the firm; and
(b) does not satisfy the independence test in subsection
(7) |
|
12 |
a person who: |
1 and 2 |
|
|
(a) is a former professional employee of the firm; and
(b) does not satisfy the independence test in subsection
(7) |
|
History
S 324CF(5) amended by No 101 of 2007, s 3, Sch 1, Pt 1
[
50].
S 324CF(5) inserted by No 103 of 2004, s 3, Sch 1, Pt 3
[
95].
[
CCH Note:
Act No 101 of 2007, Sch 1, Pt 6
[
234] contained the following application provision (which was effective 28 June 2007):
Application of items 47, 48, 50 and 52 to 59
The amendments made by items 47, 48, 50 and 52 to 59 of this Schedule apply to:
(a) an audit of the financial report for a financial year; or
(b) an audit or review of the financial report for a half-year in a financial year;
if the financial year begins on or after the day on which those items commence.
]
Maximum hours test
324CF(6)
A non-audit services provider satisfies the maximum hours test in this subsection if:
(a)
the number of hours for which the person provides services (other than services related to the conduct of an audit) to the audited body on behalf of the auditor during the period to which the audit relates does not exceed 10 hours; and
(b)
the number of hours for which the person provided services (other than services related to the conduct of an audit) to the audited body on behalf of the auditor during the 12 months immediately before the beginning of the period to which the audit relates does not exceed 10 hours.
In a prosecution for an offence based on subsection
(1)
or
(2)
, the prosecution must prove that the non-audit services provider did not satisfy the maximum hours test in this subsection.
History
S 324CF(6) inserted by No 103 of 2004, s 3, Sch 1, Pt 3
[
95].
324CF(6A)
Paragraphs
(6)(a)
and
(b)
do not apply if:
(a)
the audited body is a registrable superannuation entity; and
(b)
the services are required or permitted to be provided under the prudential standards (within the meaning of the
Superannuation Industry (Supervision) Act 1993
).
History
S 324CF(6A) inserted by No 29 of 2023, s 3, Sch 6[108] (effective 1 July 2023).
Independence test
324CF(7)
A person satisfies the independence test in this subsection in relation to a firm if the person:
(a)
does not influence the operations or financial policies of the accounting and audit practice conducted by the firm; and
(b)
does not participate, or appear to participate, in the business or professional activities of the accounting and audit practice conducted by the firm; and
(c)
does not have any rights against the firm, or the members of the firm, in relation to the accounting and audit practice conducted by the firm in relation to the termination of, or the value of, the person's former partnership interest in the firm; and
(d)
has no financial arrangements with the firm in relation to the accounting and audit practice conducted by the firm, other than:
(i)
an arrangement providing for regular payments of a fixed pre-determined dollar amount which is not dependent, directly or indirectly, on the revenues, profits or earnings of the firm; or
(ii)
an arrangement providing for regular payments of a dollar amount where the method of calculating the dollar amount is fixed and is not dependent, directly or indirectly, on the revenues, profits or earnings of the firm; and
(e)
without limiting paragraph
(d)
, has no financial arrangement with the firm to receive a commission or similar payment in relation to business generated by the person for the accounting and audit practice conducted by the firm.
In a prosecution for an offence based on subsection
(1)
or
(2)
, the prosecution must prove that the person did not satisfy the independence test in this subsection in relation to the firm.
History
S 324CF(7) inserted by No 103 of 2004, s 3, Sch 1, Pt 3
[
95].
324CF(8)
In applying subsection
(7)
, disregard any rights that the person has against the firm, or the members of the firm, by way of an indemnity for, or contribution in relation to, liabilities incurred by the person when the person was a member or employee of the firm.
History
S 324CF(8) inserted by No 103 of 2004, s 3, Sch 1, Pt 3
[
95].
Meaning of holding by firm in body corporate
324CF(9)
For the purposes of item 9 in the table in subsection
(5)
, a firm is taken to have a holding in a body corporate if the holding is one of the firm's partnership assets.
History
S 324CF(9) inserted by No 103 of 2004, s 3, Sch 1, Pt 3
[
95].
SECTION 324CG
AUDITOR INDEPENDENCE
-
SPECIFIC REQUIREMENTS FOR AUDIT COMPANY
Specific independence requirements for audit company
324CG(1)
An audit company contravenes this subsection if:
(a)
the audit company engages in audit activity at a particular time; and
(b)
a relevant item of the table in subsection
324CH(1)
applies at that time to a person or entity covered by subsection
(9)
of this section; and
(c)
the audit company is or becomes aware of the circumstances referred to in paragraph
(b)
; and
(d)
the audit company does not, as soon as possible after the audit company becomes aware of those circumstances, take all reasonable steps to ensure that the audit company does not continue to engage in audit activity in those circumstances.
History
S 324CG(1) inserted by No 103 of 2004, s 3, Sch 1, Pt 3
[
95].
Audit company to notify ASIC
324CG(1A)
An audit company contravenes this subsection if:
(a)
the audit company is the auditor of an audited body; and
(b)
a relevant item of the table in subsection
324CH(1)
applies to a person or entity covered by subsection
(9)
of this section while the audit company is the auditor of the audited body; and
(c)
on a particular day (the
start day
), the audit company becomes aware of the circumstances referred to in paragraph
(b)
; and
(d)
at the end of the period of 7 days from the start day:
(i)
those circumstances remain in existence; and
(ii)
the audit company has not informed ASIC in writing of those circumstances.
Note: If the audited body is a public company, a registered scheme or a registrable superannuation entity, the audit appointment will be terminated at the end of the period of 21 days (or a longer period that has been approved by ASIC) from the day a notice under this subsection is given if the notice is not followed up by a notice under:
(a) subsection
327B(2C)
(public company); or
(b) subsection
328E(5)
(public company with crowd-sourced funding); or
(c) subsection
331AAA(2C)
(registered scheme); or
(d) subsection
331AH(3)
(registrable superannuation entity).
History
S 324CG(1A) amended by No 29 of 2023, s 3, Sch 6[109] and
[
110] (effective 1 July 2023).
S 324CG(1A) (Note) substituted by No 17 of 2017, s 3, Sch 2
[
15].
S 324CG(1A) (Note) amended by No 101 of 2007, s 3, Sch 1, Pt 1
[
51].
S 324CG(1A) inserted by No 103 of 2004, s 3, Sch 1, Pt 3
[
95].
324CG(1B)
If the audit company gives ASIC a notice under paragraph
(1A)(d)
, ASIC must, as soon as practicable after the notice has been received, give a copy of the notice to the audited body.
History
S 324CG(1B) inserted by No 103 of 2004, s 3, Sch 1, Pt 3
[
95].
Strict liability contravention of specific independence requirements by audit company
324CG(2)
An audit company contravenes this subsection if:
(a)
the audit company engages in audit activity at a particular time; and
(b)
a relevant item of the table in subsection
324CH(1)
applies at that time to a person or entity covered by subsection
(9)
of this section.
History
S 324CG(2) inserted by No 103 of 2004, s 3, Sch 1, Pt 3
[
95].
324CG(3)
For the purposes of an offence based on subsection
(2)
, strict liability applies to the physical elements of the offence specified in paragraph
(2)(b)
.
Note 1: For
strict liability
, see section 6.1 of the
Criminal Code
.
Note 2: Subsection
(4)
provides a defence.
History
S 324CG(3) inserted by No 103 of 2004, s 3, Sch 1, Pt 3
[
95].
324CG(4)
An audit company does not commit an offence because of a contravention of subsection
(2)
in relation to audit activity engaged in by the audit company at a particular time if the audit company has reasonable grounds to believe that the audit company had in place at that time a quality control system that provided reasonable assurance (taking into account the size and nature of the audit practice of the audit company) that the audit company and the audit company's employees complied with the requirements of this Subdivision.
Note: A defendant bears an evidential burden in relation to the matters in this subsection, see subsection 13.3(3) of the
Criminal Code
.
History
S 324CG(4) inserted by No 103 of 2004, s 3, Sch 1, Pt 3
[
95].
Contraventions by directors of audit company
324CG(5)
A person (the
defendant
) contravenes this subsection if:
(a)
an audit company engages in audit activity at a particular time; and
(b)
a relevant item of the table in subsection
324CH(1)
applies at that time to a person or entity covered by subsection
(9)
of this section; and
(c)
the defendant is a director of the audit company at that time; and
(d)
the defendant is or becomes aware of the circumstances referred to in paragraphs
(a)
and
(b)
; and
(e)
the defendant does not, as soon as possible after the defendant becomes aware of those circumstances, take all reasonable steps to ensure that the audit company does not continue to engage in audit activity in those circumstances.
History
S 324CG(5) inserted by No 103 of 2004, s 3, Sch 1, Pt 3
[
95].
Director of audit company to notify ASIC
324CG(5A)
A person (the
defendant
) contravenes this subsection if:
(a)
an audit company is the auditor of an audited body; and
(b)
a relevant item of the table in subsection
324CH(1)
applies to a person or entity covered by subsection
(9)
of this section while the audit company is the auditor of the audited body; and
(c)
the defendant is a director of the audit company at a time when the circumstances referred to in paragraph
(b)
exist; and
(d)
on a particular day (the
start day
), the defendant becomes aware of the circumstances referred to in paragraphs
(a)
and
(b)
; and
(e)
at the end of the period of 7 days from the start day:
(i)
the circumstances referred to in paragraph
(b)
remain in existence; and
(ii)
ASIC has not been informed in writing of those circumstances by the defendant, by another director of the company or by the audit company.
Note: If the audited body is a public company, a registered scheme or a registrable superannuation entity, the audit appointment will be terminated at the end of the period of 21 days (or a longer period that has been approved by ASIC) from the day a notice under this subsection is given if the notice is not followed up by a notice under:
(a) subsection
327B(2C)
(public company); or
(b) subsection
328E(5)
(public company with crowd-sourced funding); or
(c) subsection
331AAA(2C)
(registered scheme); or
(d) subsection
331AH(3)
(registrable superannuation entity).
History
S 324CG(5A) amended by No 29 of 2023, s 3, Sch 6[111] and
[
112] (effective 1 July 2023).
S 324CG(5A) (Note) substituted by No 17 of 2017, s 3, Sch 2
[
16].
S 324CG(5A) (Note) amended by No 101 of 2007, s 3, Sch 1, Pt 1
[
51].
S 324CG(5A) inserted by No 103 of 2004, s 3, Sch 1, Pt 3
[
95].
324CG(5B)
A person is not excused from informing ASIC under subsection
(5A)
that the circumstances referred to in paragraph
(5A)(b)
exist on the ground that the information might tend to incriminate the person or expose the person to a penalty.
History
S 324CG(5B) inserted by No 103 of 2004, s 3, Sch 1, Pt 3
[
95].
324CG(5C)
However, if the person is a natural person:
(a)
the information; and
(b)
the giving of the information;
are not admissible in evidence against the person in a criminal proceeding, or any other proceeding for the recovery of a penalty, other than proceedings for an offence based on the information given being false or misleading.
History
S 324CG(5C) inserted by No 103 of 2004, s 3, Sch 1, Pt 3
[
95].
324CG(5D)
If ASIC is given a notice under paragraph
(5A)(e)
, ASIC must, as soon as practicable after the notice is received, give a copy of the notice to the audited body.
History
S 324CG(5D) inserted by No 103 of 2004, s 3, Sch 1, Pt 3
[
95].
Strict liability contravention of specific independence requirements by director of audit company
324CG(6)
A person (the
defendant
) contravenes this subsection if:
(a)
an audit company engages in audit activity at a particular time; and
(b)
a relevant item of the table in subsection
324CH(1)
applies at that time to a person or entity covered by subsection
(9)
of this section; and
(c)
the defendant is a director of the audit company at that time.
History
S 324CG(6) inserted by No 103 of 2004, s 3, Sch 1, Pt 3
[
95].
324CG(7)
For the purposes of an offence based on subsection
(6)
, strict liability applies to the physical elements of the offence specified in paragraphs
(6)(a)
and
(b)
.
Note 1: For
strict liability
, see section 6.1 of the
Criminal Code
.
Note 2: Subsection
(8)
provides a defence.
History
S 324CG(7) inserted by No 103 of 2004, s 3, Sch 1, Pt 3
[
95].
324CG(8)
A person does not commit an offence because of a contravention of subsection
(6)
in relation to audit activity engaged in by an audit company at a particular time if the person has reasonable grounds to believe that the audit company had in place at that time a quality control system that provided reasonable assurance (taking into account the size and nature of the audit practice of the audit company) that the audit company and its employees complied with the requirements of this Subdivision.
Note: A defendant bears an evidential burden in relation to the matters in this subsection, see subsection 13.3(3) of the
Criminal Code
.
History
S 324CG(8) inserted by No 103 of 2004, s 3, Sch 1, Pt 3
[
95].
People and entities covered
324CG(9)
The following table sets out:
(a)
the persons and entities covered by this subsection in relation to audit activity engaged in by an audit company; and
(b)
the items of the table in subsection
324CH(1)
that are the relevant items for each of those persons and entities:
Table for audit companies
Table for audit companies
Audit company
|
Item
|
For this person or entity...
|
the relevant items of the table in subsection 324CH(1) are...
|
1 |
the audit company |
4
7
10 to 19 |
2 |
a service company or trust acting for, or on behalf of, the audit company, or another entity performing a similar function |
4
7
10 to 19 |
3 |
a director or senior manager of the audit company |
1 to 7
9
15 |
4 |
a professional member of the audit team conducting the audit of the audited body |
1 to 6
8 to 19 |
5 |
an immediate family member of a professional member of the audit team conducting the audit of the audited body |
1 and 2
10 to 19 |
6 |
a person who: |
10 to 12 |
|
|
(a) is a non-audit services provider; and
(b) does not satisfy the maximum hours test in subsection
(10) |
|
7 |
an immediate family member of a person who: |
10 to 12 |
|
|
(a) is a non-audit services provider; and
(b) does not satisfy the maximum hours test in subsection
(10) |
|
8 |
an entity that the audit company (or a service company or trust acting for, or on behalf of, the audit company, or another entity performing a similar function) controls |
15 |
9 |
a body corporate in which the audit company (or a service company or trust acting for, or on behalf of, the audit company, or another entity performing a similar function) has a substantial holding |
15 |
10 |
an entity that an officer of the audit company controls or a body corporate in which an officer of the audit company has a substantial holding |
16 |
11 |
a person who: |
1 and 2 |
|
|
(a) is a former officer of the audit company; and
(b) does not satisfy the independence test in subsection
(11) |
|
12 |
a person who: |
1 and 2 |
|
|
(a) is a former professional employee of the audit company; and
(b) does not satisfy the independence test in subsection
(11) |
|
History
S 324CG(9) amended by No 101 of 2007, s 3, Sch 1, Pt 1
[
52].
S 324CG(9) inserted by No 103 of 2004, s 3, Sch 1, Pt 3
[
95].
[
CCH Note:
Act No 101 of 2007, Sch 1, Pt 6
[
234] contained the following application provision (which was effective 28 June 2007):
Application of items 47, 48, 50 and 52 to 59
The amendments made by items 47, 48, 50 and 52 to 59 of this Schedule apply to:
(a) an audit of the financial report for a financial year; or
(b) an audit or review of the financial report for a half-year in a financial year;
if the financial year begins on or after the day on which those items commence.
]
Maximum hours test
324CG(10)
A non-audit services provider satisfies the maximum hours test in this subsection if:
(a)
the number of hours for which the person provides services (other than services related to the conduct of an audit) to the audited body on behalf of the auditor during the period to which the audit relates does not exceed 10 hours; and
(b)
the number of hours for which the person provided services (other than services related to the conduct of an audit) to the audited body on behalf of the auditor during the 12 months immediately before the beginning of the period to which the audit relates does not exceed 10 hours.
In a prosecution for an offence based on subsection
(1)
,
(2)
,
(5)
or
(6)
, the prosecution must prove that the non-audit services provider did not satisfy the maximum hours test in this subsection.
History
S 324CG(10) inserted by No 103 of 2004, s 3, Sch 1, Pt 3
[
95].
324CG(10A)
Paragraphs
(10)(a)
and
(b)
do not apply if:
(a)
the audited body is a registrable superannuation entity; and
(b)
the services are required or permitted to be provided under the prudential standards (within the meaning of the
Superannuation Industry (Supervision) Act 1993
).
History
S 324CG(10A) inserted by No 29 of 2023, s 3, Sch 6[113] (effective 1 July 2023).
Independence test
324CG(11)
A person satisfies the independence test in this subsection in relation to an audit company if the person:
(a)
does not influence the operations or financial policies of the accounting and audit practice conducted by the audit company; and
(b)
does not participate, or appear to participate, in the business or professional activities of the accounting and audit practice conducted by the audit company; and
(c)
does not have any rights against the audit company in relation to the accounting and audit practice conducted by the audit company in relation to the termination of the person's former position as an officer of the audit company; and
(d)
has no financial arrangements with the audit company in relation to the accounting and audit practice conducted by the audit company, other than:
(i)
an arrangement providing for regular payments of a fixed pre-determined dollar amount which is not dependent, directly or indirectly, on the revenues, profits or earnings of the audit company; or
(ii)
an arrangement providing for regular payments of a dollar amount where the method of calculating the dollar amount is fixed and is not dependent, directly or indirectly, on the revenues, profits or earnings of the audit company; and
(e)
without limiting paragraph
(d)
, has no financial arrangement with the audit company to receive a commission or similar payment in relation to business generated by the person for the accounting and audit practice conducted by the audit company.
In a prosecution for an offence based on subsection
(1)
,
(2)
,
(5)
or
(6)
, the prosecution must prove that the person did not satisfy the independence test in this subsection in relation to the audit company.
History
S 324CG(11) inserted by No 103 of 2004, s 3, Sch 1, Pt 3
[
95].
324CG(12)
In applying subsection
(11)
, disregard any rights that the person has against the audit company by way of an indemnity for, or contribution in relation to, liabilities incurred by the person when the person was an officer or employee of the audit company.
History
S 324CG(12) inserted by No 103 of 2004, s 3, Sch 1, Pt 3
[
95].
SECTION 324CH
RELEVANT RELATIONSHIPS
Table of relevant relationships.
324CH(1)
The following table lists the relationships between:
(a)
a person or a firm; and
(b)
the audited body for an audit;
that are relevant for the purposes of sections
324CE
,
324CF
and
324CG
:
Table of relevant relationships
Table of relevant relationships
Relevant relationships
|
Item
|
This item applies to a person (or, if applicable, to a firm) at a particular time if at that time the person (or firm)...
|
1 |
is an officer of the audited body
This item does not apply if subsection
(3A)
(about small proprietary companies) applies to the audited body for the relevant financial year. |
2 |
is an audit-critical employee of the audited body
This item does not apply if subsection
(3A)
(about small proprietary companies) applies to the audited body for the relevant financial year. |
3 |
is a partner of: |
|
|
(a) an officer of the audited body; or
(b) an audit-critical employee of the audited body |
|
This item does not apply if subsection
(3A)
(about small proprietary companies) applies to the audited body for the relevant financial year. |
4 |
is an employer of: |
|
|
(a) an officer of the audited body; or
(b) an audit-critical employee of the audited body |
|
This item does not apply if subsection
(3A)
(about small proprietary companies) applies to the audited body for the relevant financial year. |
5 |
is an employee of: |
|
|
(a) an officer of the audited body; or
(b) an audit-critical employee of the audited body |
|
This item does not apply if subsection
(3A)
(about small proprietary companies) applies to the audited body for the relevant financial year. |
6 |
is a partner or employee of an employee of: |
|
|
(a) an officer of the company; or
(b) an audit-critical employee of the company |
|
This item does not apply if subsection
(3A)
(about small proprietary companies) applies to the audited body for the relevant financial year. |
7 |
provides remuneration to: |
|
|
(a) an officer of the audited body; or
(b) an audit-critical employee of the audited body; |
|
for acting as a consultant to the person
This item does not apply if subsection
(3A)
(about small proprietary companies) applies to the audited body for the relevant financial year. |
8 |
was an officer of the audited body at any time during: |
|
|
(a) the period to which the audit relates; or
(b) the 12 months immediately preceding the beginning of the period to which the audit relates; or
(c) the period during which the audit is being conducted or the auditor
'
s report is being prepared |
|
This item does not apply if subsection
(3A)
(about small proprietary companies) applies to the audited body for the relevant financial year. |
9 |
was an audit-critical employee of the audited body at any time during: |
|
|
(a) the period to which the audit relates; or
(b) the 12 months immediately preceding the beginning of the period to which the audit relates; or
(c) the period during which the audit is being conducted or the auditor
'
s report is being prepared |
|
This item does not apply if subsection
(3A)
(about small proprietary companies) applies to the audited body for the relevant financial year. |
10 |
has an asset that is an investment in the audited body |
11 |
has an asset that is a beneficial interest in an investment in the audited body and has control over that asset |
12 |
has an asset that is a beneficial interest in an investment in the audited body that is a material interest |
13 |
has an asset that is a material investment in an entity that has a controlling interest in the audited body |
14 |
has an asset that is a material beneficial interest in an investment in an entity that has a controlling interest in the audited body |
15 |
owes an amount to: |
|
|
(a) the audited body; or
(b) a related body corporate; or
(c) an entity that the audited body controls; |
|
unless the debt is disregarded under subsection
(5)
,
(5A)
or
(5B) |
16 |
is owed an amount by: |
|
|
(a) the audited body; or
(b) a related body corporate; or
(c) an entity that the audited body controls; |
|
under a loan that is not disregarded under subsection
(6)
or
(6A) |
17 |
is liable under a guarantee of a loan made to: |
|
|
(a) the audited body; or
(b) a related body corporate; or
(c) an entity that the audited body controls |
18 |
(Repealed by No 101 of 2007, s 3, Sch 1, Pt 1
[
55] (effective 28 June 2007).) |
19 |
is entitled to the benefit of a guarantee given by: |
|
|
(a) the audited body; or
(b) a related body corporate; or
(c) an entity that the audited body controls |
|
in relation to a loan unless the guarantee is disregarded under subsection
(8) |
History
S 324CH(1) amended by No 76 of 2023, s 3, Sch 2[103] (effective 20 October 2023).
S 324CH(1) amended by No 106 of 2018, s 3, Sch 1
[
27] (effective 19 October 2018).
S 324CH(1) amended by No 101 of 2007, s 3, Sch 1, Pt 1
[
53-55].
S 324CH(1) inserted by No 103 of 2004, s 3, Sch 1, Pt 3
[
95].
[
CCH Note:
Act No 101 of 2007, Sch 1, Pt 6
[
234] contained the following application provision (which was effective 28 June 2007):
Application of items 47, 48, 50 and 52 to 59
The amendments made by items 47, 48, 50 and 52 to 59 of this Schedule apply to:
(a) an audit of the financial report for a financial year; or
(b) an audit or review of the financial report for a half-year in a financial year;
if the financial year begins on or after the day on which those items commence.
]
Applying table if audited body is registered scheme.
324CH(2)
If the audited body is a registered scheme, apply the table in subsection
(1)
as if:
(a)
references to the audited body in items 1 to 9, and items 15 to 19, in the table were references to the responsible entity for the registered scheme; and
(b)
references to an interest in the audited body in items 10 to 12 in the table were references to an interest in either:
(i)
the registered scheme; or
(ii)
the responsible entity for the registered scheme; and
(c)
references to an investment in an entity that has a controlling interest in the audited body in items 13 and 14 of the table were references to an investment in an entity that has a controlling interest in the responsible entity for the registered scheme.
History
S 324CH(2) inserted by No 103 of 2004, s 3, Sch 1, Pt 3
[
95].
Applying table if audited body is registrable superannuation entity
324CH(2A)
If the audited body is a registrable superannuation entity, apply the table in subsection
(1)
as if:
(a)
references to the audited body in items 1 to 9, and items 15 to 19, in the table were references to the RSE licensee for the registrable superannuation entity; and
(b)
references to an interest in the audited body in items 10 to 12 in the table were references to an interest in either:
(i)
the registrable superannuation entity; or
(ii)
the RSE licensee for the registrable superannuation entity; and
(c)
references to an investment in an entity that has a controlling interest in the audited body in items 13 and 14 in the table were references to an investment in an entity that has a controlling interest in the RSE licensee for the registrable superannuation entity.
History
S 324CH(2A) inserted by No 29 of 2023, s 3, Sch 6[114] (effective 1 July 2023).
Applying table if audited body is listed entity (other than registered scheme).
324CH(3)
If the audited body is a listed entity (other than a registered scheme), apply the table in subsection
(1)
as if references in the table to the audited body included references to an associated entity of the audited body.
Note: See section
50AAA
for the definition of
associated entity
.
History
S 324CH(3) inserted by No 103 of 2004, s 3, Sch 1, Pt 3
[
95].
Small proprietary companies.
324CH(3A)
This subsection applies to an audited body for a financial year if the body:
(a)
is a small proprietary company for the financial year; and
(b)
either:
(i)
does not have any CSF shareholders at any time during the financial year; or
(ii)
has, as at the end of the financial year, raised a total less than the CSF audit threshold from all the CSF offers it has ever made.
History
S 324CH(3A) inserted by No 106 of 2018, s 3, Sch 1
[
28] (effective 19 October 2018).
Firm assets.
324CH(4)
For the purpose of applying items 10 to 14 in the table in subsection
(1)
to an audit firm, the firm is taken to have a particular asset if the asset is one of the firm's partnership assets.
History
S 324CH(4) inserted by No 103 of 2004, s 3, Sch 1, Pt 3
[
95].
Housing loan exception.
324CH(5)
For the purposes of item 15 of the table in subsection
(1)
, disregard a debt owed by an individual to a body corporate or entity if:
(a)
the body corporate or entity is:
(i)
an Australian ADI; or
(ii)
a body corporate registered under section
21
of the
Life Insurance Act 1995
; and
(b)
the debt arose because of a loan that the body corporate or entity made to the person in the ordinary course of its ordinary business; and
(c)
the person used the amount of the loan to pay the whole or part of the purchase price of premises that the person uses as their principal place of residence.
History
S 324CH(5) amended by No 75 of 2009, Sch 1
[
196].
S 324CH(5) inserted by No 103 of 2004, s 3, Sch 1, Pt 3
[
95].
Goods and services exception.
324CH(5A)
For the purposes of item 15 of the table in subsection
(1)
, disregard a debt owed by a person or firm to a body corporate or entity if:
(a)
the debt arises from the acquisition of goods or services from:
(i)
the audited body; or
(ii)
an entity that the audited body controls; or
(iii)
a related body corporate; and
(b)
the acquisition of goods and services was on the terms and conditions that would normally apply to goods or services acquired from the body, entity or related body corporate; and
(c)
the debt is owed on the terms and conditions that would normally apply to a debt owing to the body, entity or related body corporate; and
(d)
the goods or services will be used by the person or firm:
(i)
for the personal use of the person or firm; or
(ii)
in the ordinary course of business of the person or firm.
History
S 324CH(5A) inserted by No 101 of 2007, s 3, Sch 1, Pt 1
[
56].
[
CCH Note:
Act No 101 of 2007, Sch 1, Pt 6
[
234] contained the following application provision (which was effective 28 June 2007):
Application of items 47, 48, 50 and 52 to 59
The amendments made by items 47, 48, 50 and 52 to 59 of this Schedule apply to:
(a) an audit of the financial report for a financial year; or
(b) an audit or review of the financial report for a half-year in a financial year;
if the financial year begins on or after the day on which those items commence.
]
Ordinary commercial loan exception.
324CH(5B)
For the purposes of item 15 of the table in subsection
(1)
, disregard a debt owed under a loan that:
(a)
is made or given in the ordinary course of business of:
(i)
the audited body; or
(ii)
the related body corporate; or
(iii)
the controlled entity; and
(b)
is made or given on the terms and conditions that would normally apply to a loan made or given by the audited body, the related body corporate or the controlled entity.
History
S 324CH(5B) inserted by No 101 of 2007, s 3, Sch 1, Pt 1
[
56].
[
CCH Note:
Act No 101 of 2007, Sch 1, Pt 6
[
234] contained the following application provision (which was effective 28 June 2007):
Application of items 47, 48, 50 and 52 to 59
The amendments made by items 47, 48, 50 and 52 to 59 of this Schedule apply to:
(a) an audit of the financial report for a financial year; or
(b) an audit or review of the financial report for a half-year in a financial year;
if the financial year begins on or after the day on which those items commence.
]
Loans by immediate family members in ordinary business dealing with client.
324CH(6)
For the purposes of item 16 of the table in subsection
(1)
, disregard a debt owed to a person by a body corporate or entity if:
(a)
the item applies to the person because the person is an immediate family member of:
(i)
a professional member of the audit team conducting the audit of the audited body; or
(ii)
a non-audit services provider; and
(b)
the debt is incurred in the ordinary course of business of the body corporate or entity.
History
S 324CH(6) inserted by No 103 of 2004, s 3, Sch 1, Pt 3
[
95].
324CH(6A)
For the purposes of item 16 in the table in subsection
(1)
, disregard an amount owed under a loan to a person or firm by the audited body, a related body corporate or an entity that the audited body controls if:
(a)
the body, body corporate or entity is an Australian ADI; and
(b)
the amount is deposited in a basic deposit product provided by the body, body corporate or entity; and
(c)
the amount was deposited, in the ordinary course of business of the audited body, body corporate or entity, on the terms and conditions that would normally apply to a basic deposit product provided by the body, body corporate or entity.
History
S 324CH(6A) amended by No 76 of 2023, s 3, Sch 2[272] (effective 20 October 2023).
S 324CH(6A) inserted by No 101 of 2007, s 3, Sch 1, Pt 1
[
57].
[
CCH Note:
Act No 101 of 2007, Sch 1, Pt 6
[
234] contained the following application provision (which was effective 28 June 2007):
Application of items 47, 48, 50 and 52 to 59
The amendments made by items 47, 48, 50 and 52 to 59 of this Schedule apply to:
(a) an audit of the financial report for a financial year; or
(b) an audit or review of the financial report for a half-year in a financial year;
if the financial year begins on or after the day on which those items commence.
]
324CH(7)
(Repealed by No 101 of 2007, s 3, Sch 1, Pt 1
[
58] (effective 28 June 2007).)
[
CCH Note:
Act No 101 of 2007, Sch 1, Pt 6
[
234] contained the following application provision (which was effective 28 June 2007):
Application of items 47, 48, 50 and 52 to 59
The amendments made by items 47, 48, 50 and 52 to 59 of this Schedule apply to:
(a) an audit of the financial report for a financial year; or
(b) an audit or review of the financial report for a half-year in a financial year;
if the financial year begins on or after the day on which those items commence.
]
Ordinary commercial guarantee exception.
324CH(8)
For the purposes of item 19 of the table in subsection
(1)
, disregard any guarantee that:
(a)
is made or given in the ordinary course of the business of:
(i)
the audited body; or
(ii)
the related body corporate; or
(iii)
the controlled entity; and
(b)
is made or given on the terms and conditions that would normally apply to a guarantee made or given by the audited body, the related body corporate or the controlled entity.
History
S 324CH(8) inserted by No 103 of 2004, s 3, Sch 1, Pt 3
[
95].
Future debts and liabilities.
324CH(8A)
In this section:
(a)
a reference to a debt or amount that is owed by one entity to another entity includes a reference to a debt or amount that will (or may) be owed by the first entity to the other entity under an existing agreement between the entities; and
(b)
a reference to a liability under a guarantee of a loan includes a reference to a liability that will arise under the guarantee if the loan is not repaid.
History
S 324CH(8A) inserted by No 101 of 2007, s 3, Sch 1, Pt 1
[
59].
[
CCH Note:
Act No 101 of 2007, Sch 1, Pt 6
[
234] contained the following application provision (which was effective 28 June 2007):
Application of items 47, 48, 50 and 52 to 59
The amendments made by items 47, 48, 50 and 52 to 59 of this Schedule apply to:
(a) an audit of the financial report for a financial year; or
(b) an audit or review of the financial report for a half-year in a financial year;
if the financial year begins on or after the day on which those items commence.
]
Relevant financial year.
324CH(9)
In this section:
relevant financial year
, in relation to audit activities undertaken in relation to an audit or review of a financial report for a financial year or an audit or review of a financial report for a half-year in a financial year, means the financial year immediately before that financial year.
History
S 324CH(9) amended by No 66 of 2010, s 3, Sch 1, Pt 1
[
46].
S 324CH(9) inserted by No 103 of 2004, s 3, Sch 1, Pt 3
[
95].
SECTION 324CI
324CI
SPECIAL RULE FOR RETIRING PARTNERS OF AUDIT FIRMS AND RETIRING DIRECTORS OF AUTHORISED AUDIT COMPANIES
A person contravenes this section if:
(a)
the person ceases to be:
(i)
a member of an audit firm; or
(ii)
a director of an audit company;
at a particular time (the
departure time
); and
(b)
at any time before the departure time, the audit firm or audit company has engaged in an audit of an audited body; and
(c)
the person was a professional member of the audit team for the audit; and
(d)
within the period of 2 years starting on the date the report under section
308
or
309
was made on the latest audit to which paragraphs (b) and (c) apply, the person becomes, or continues to be, an officer of the audited body; and
(e)
subsection
324CH(3A)
(about small proprietary companies) does not apply to the audited body for the most recently ended financial year.
If the audited body is a listed entity (other than a registered scheme), apply paragraph (d) as if references in that paragraph to the audited body included references to a related body corporate of the audited body.
History
S 324CI amended by No 106 of 2018, s 3, Sch 1
[
29] (effective 19 October 2018).
S 324CI amended by No 101 of 2007, s 3, Sch 1, Pt 1
[
60] (effective 28 June 2007).
S 324CI inserted by No 103 of 2004, s 3, Sch 1, Pt 3
[
95] (effective 1 July 2004).
[
CCH Note:
Act No 101 of 2007, Sch 1, Pt 6
[
235] contained the following application provision (which was effective 28 June 2007):
Application of items 60, 61 and 62
The amendments made by items 60, 61 and 62 apply to any person who ceases to be:
(a) a member of an audit firm; or
(b) a director of an audit company; or
(c) a professional employee of an audit company;
whether the person so ceases before or after the day on which those items commence.
]
SECTION 324CJ
324CJ
SPECIAL RULE FOR RETIRING PROFESSIONAL MEMBER OF AUDIT COMPANY
A person contravenes this section if:
(a)
the person who is not a director of an audit company ceases to be a professional employee of the audit company at a particular time (the
departure time
); and
(b)
at any time before the departure time, the audit company has engaged in an audit of an audited body; and
(c)
the person was a lead auditor or review auditor for the audit; and
(d)
within the period of 2 years starting on the date the report under section
308
or
309
was made on the latest audit to which paragraphs (b) and (c) apply, the person becomes, or continues to be, an officer of the audited body; and
(e)
subsection
324CH(3A)
(about small proprietary companies) does not apply to the audited body for the most recently ended financial year.
If the audited body is a listed entity (other than a registered scheme), apply paragraph (d) as if references in that paragraph to the audited body included references to a related body corporate of the audited body.
History
S 324CJ amended by No 106 of 2018, s 3, Sch 1
[
29] (effective 19 October 2018).
S 324CJ amended by No 101 of 2007, s 3, Sch 1, Pt 1
[
61] (effective 28 June 2007).
S 324CJ inserted by No 103 of 2004, s 3, Sch 1, Pt 3
[
95] (effective 1 July 2004).
[
CCH Note:
Act No 101 of 2007, Sch 1, Pt 6
[
235] contained the following application provision (which was effective 28 June 2007):
Application of items 60, 61 and 62
The amendments made by items 60, 61 and 62 apply to any person who ceases to be:
(a) a member of an audit firm; or
(b) a director of an audit company; or
(c) a professional employee of an audit company;
whether the person so ceases before or after the day on which those items commence.
]
SECTION 324CK
324CK
MULTIPLE FORMER AUDIT FIRM PARTNERS OR AUDIT COMPANY DIRECTORS
A person contravenes this section if:
(a)
an audit firm, or audit company, is an auditor of an audited body for a financial year; and
(b)
the person has at any time been a member of the audit firm or a director of the audit company; and
(c)
the person becomes an officer of the audited body within a period of 5 years after the person ceased (or last ceased) to be a member of the audit firm or a director of the audit company (as the case may be); and
(d)
at the time when paragraph (c) is satisfied another person who is or who also has at any time been a member of the audit firm, or a director of the audit company, at a time when the audit firm, or audit company, undertook an audit of the audited body is also an officer of the audited body; and
(e)
subsection
324CH(3A)
(about small proprietary companies) does not apply to the audited body for the most recently ended financial year.
If the audited body is a listed entity (other than a registered scheme), apply paragraphs (c) and (d) as if references in those paragraphs to the audited body included references to a related body corporate of the audited body.
History
S 324CK amended by No 106 of 2018, s 3, Sch 1
[
29] (effective 19 October 2018).
S 324CK amended by No 101 of 2007, s 3, Sch 1, Pt 1
[
62] (effective 28 June 2007).
S 324CK inserted by No 103 of 2004, s 3, Sch 1, Pt 3
[
95] (effective 1 July 2004).
[
CCH Note:
Act No 101 of 2007, Sch 1, Pt 6
[
235] contained the following application provision (which was effective 28 June 2007):
Application of items 60, 61 and 62
The amendments made by items 60, 61 and 62 apply to any person who ceases to be:
(a) a member of an audit firm; or
(b) a director of an audit company; or
(c) a professional employee of an audit company;
whether the person so ceases before or after the day on which those items commence.
]
Subdivision C
-
Common provisions
SECTION 324CL
PEOPLE WHO ARE REGARDED AS OFFICERS OF A COMPANY FOR THE PURPOSES OF THIS DIVISION
324CL(1)
For the purposes of this Division, a person is taken to be an officer of a company if:
(a)
the person is an officer of:
(i)
a related body corporate; or
(ii)
an entity that the company controls; or
(b)
the person has, at any time within the immediately preceding period of 12 months, been an officer or promoter of:
(i)
the company; or
(ii)
a related body corporate; or
(iii)
an entity that the company controlled at that time.
Note: This section applies in relation to retail CCIVs in a modified form: see section
1232Q
.
History
S 324CL(1) amended by No 8 of 2022, s 3, Sch 2[134] (effective 1 July 2022).
324CL(2)
Paragraph (b) does not apply if ASIC directs that it does not apply in relation to the person in relation to the company. ASIC may give the direction only if ASIC thinks that it is appropriate to do so in the circumstances of the case.
324CL(3)
For the purposes of this Division, a person is not taken to be an officer of a company by reason only of being, or having been, the liquidator of:
(a)
the company; or
(b)
a related body corporate; or
(c)
an entity that the company controls or has controlled.
324CL(4)
For the purposes of this Division, a person is not taken to be an officer of a company merely because of one or more of the following:
(a)
having been appointed as auditor of:
(i)
the company; or
(ii)
a related body corporate; or
(iii)
an entity that the company controls or has controlled;
(b)
having been appointed, for any purpose relating to taxation, as public officer of:
(i)
a body corporate; or
(ii)
an unincorporated body; or
(iii)
a trust estate;
(c)
being or having been authorised to accept service of process or notices on behalf of:
(i)
the company; or
(ii)
a related body corporate; or
(iii)
an entity that the company controls or has controlled.
History
S 324CL inserted by No 103 of 2004, s 3, Sch 1, Pt 3
[
95].
SECTION 324CLA
EXTENDED MEANING OF OFFICER OF A REGISTRABLE SUPERANNUATION ENTITY
324CLA(1)
For the purposes of this Division, a person is taken to be an officer of a registrable superannuation entity if:
(a)
the person is an officer of:
(i)
a related body corporate of the RSE licensee for the registrable superannuation entity; or
(ii)
an entity that the RSE licensee for the registrable superannuation entity controls; or
(b)
the person has, at any time within the immediately preceding period of 12 months, been an officer or promoter of:
(i)
a related body corporate of the RSE licensee for the registrable superannuation entity; or
(ii)
an entity that the RSE licensee for the registrable superannuation entity controlled at that time.
Note:
Officer
of a registrable superannuation entity is defined in section
345AAD
. This subsection extends the meaning of that expression for the purposes of this Division.
324CLA(2)
Paragraph
(1)(b)
does not apply if ASIC directs that it does not apply in relation to the person in relation to the RSE licensee for the registrable superannuation entity. ASIC may give the direction only if ASIC thinks that it is appropriate to do so in the circumstances of the case.
History
S 324CLA inserted by No 29 of 2023, s 3, Sch 6[115] (effective 1 July 2023).
Division 4
-
Deliberately disqualifying auditor
History
Div 4 inserted by No 103 of 2004, s 3, Sch 1, Pt 3
[
95] (effective 1 July 2004).
SECTION 324CM
DELIBERATELY DISQUALIFYING AUDITOR
Individual auditor
324CM(1)
An individual contravenes this subsection if:
(a)
the individual is appointed auditor of a company, registered scheme or registrable superannuation entity; and
(b)
while the appointment continues, the individual brings about a state of affairs; and
(c)
the individual cannot, while that state of affairs continues, act as auditor of the company, scheme or entity without contravening Division
2
or
3
.
History
S 324CM(1) amended by No 29 of 2023, s 3, Sch 6[116] and
[
117] (effective 1 July 2023).
Audit firm
324CM(2)
A member of a firm contravenes this subsection if:
(a)
the firm is appointed auditor of a company, registered scheme or registrable superannuation entity; and
(b)
while the appointment continues, the member brings about a state of affairs; and
(c)
the firm cannot, while that state of affairs continues, act as auditor of the company, scheme or entity without a person contravening Division
2
or
3
.
History
S 324CM(2) amended by No 29 of 2023, s 3, Sch 6[118] and
[
119] (effective 1 July 2023).
Audit company
324CM(3)
A person who is:
(a)
a member of a company; or
(b)
a director of a company; or
(c)
a lead auditor in relation to an audit conducted by a company;
contravenes this subsection if:
(d)
the company is appointed auditor of a company, registered scheme or registrable superannuation entity; and
(e)
while the appointment continues, the person brings about a state of affairs; and
(f)
the company cannot, while that state of affairs continues, act as auditor of the company, scheme or entity without contravening Division
2
or
3
.
History
S 324CM(3) amended by No 29 of 2023, s 3, Sch 6[120] and
[
121] (effective 1 July 2023).
History
S 324CM inserted by No 103 of 2004, s 3, Sch 1, Pt 3
[
95].
Division 5
-
Auditor rotation for listed companies, listed registered schemes and registrable superannuation entities
History
Div 5 heading amended by No 29 of 2023, s 3, Sch 6[122] (effective 1 July 2023).
SECTION 324DA
LIMITED TERM FOR ELIGIBILITY TO PLAY SIGNIFICANT ROLE IN AUDIT OF A LISTED COMPANY, LISTED REGISTERED SCHEME OR REGISTRABLE SUPERANNUATION ENTITY
324DA(1)
If an individual plays a significant role in the audit of a listed company, listed registered scheme or registrable superannuation entity for 5 successive financial years (the
extended audit involvement period
), the individual is not eligible to play a significant role in the audit of the company, the scheme or the entity for a later financial year (the
subsequent financial year
) unless:
(a)
the individual has not played a significant role in the audit of the company, the scheme or the entity for at least 2 successive financial years (the
intervening financial years
); and
(b)
the intervening financial years:
(i)
commence after the end of the extended audit involvement period; and
(ii)
end before the beginning of the subsequent financial year.
Note:
Play a significant role
in an audit is defined in section
9
.
History
S 324DA(1) amended by No 29 of 2023, s 3, Sch 6[124] and
[
125] (effective 1 July 2023).
324DA(2)
An individual is not eligible to play a significant role in the audit of a listed company, listed registered scheme or registrable superannuation entity for a financial year if, were the individual to do so, the individual would play a significant role in the audit of the company, the scheme or the entity for more than 5 out of 7 successive financial years.
History
S 324DA(2) amended by No 29 of 2023, s 3, Sch 6[126] and
[
127] (effective 1 July 2023).
324DA(3)
For the purposes of subsection
(2)
, disregard an individual
'
s playing of a significant role in the audit of a company, scheme or entity for a financial year if:
(a)
either:
(i)
the directors of the company, scheme or entity grant an approval under section
324DAA
in relation to the individual; or
(ii)
ASIC makes a declaration under paragraph
342A(1)(a)
in relation to the individual; and
(b)
because of the approval or the declaration, subsection
(1)
of this section does not operate to make the individual not eligible to play a significant role in the audit of the company, scheme or entity for that financial year.
History
S 324DA(3) amended by No 29 of 2023, s 3, Sch 6[128] (effective 1 July 2023).
S 324DA(3) amended by No 72 of 2012, s 3, Sch 1, Pt 1
[
5]
-
[
6].
S 324DA inserted by No 103 of 2004, s 3, Sch 1, Pt 3
[
95].
SECTION 324DAA
DIRECTORS MAY EXTEND ELIGIBILITY TERM
324DAA(1)
Subject to section
324DAB
, the directors of a listed company, or of a listed registered scheme or registrable superannuation entity, may, by resolution, grant an approval for an individual to play a significant role in the audit of the company, scheme or entity for not more than 2 successive financial years in addition to the 5 successive financial years mentioned in subsection
324DA(1)
.
History
S 324DAA(1) amended by No 29 of 2023, s 3, Sch 6[129] and
[
130] (effective 1 July 2023).
324DAA(2)
The approval must be granted before the end of those 5 successive financial years.
324DAA(3)
If the directors grant the approval, subsection
324DA(1)
applies to the individual, in relation to the audit of the company, scheme or entity, as if the references in that subsection to 5 successive financial years were references to:
(a)
if the approval is for one additional successive financial year
-
6 successive financial years; or
(b)
if the approval is for an additional 2 successive financial years
-
7 successive financial years.
History
S 324DAA(3) amended by No 29 of 2023, s 3, Sch 6[131] (effective 1 July 2023).
324DAA(4)
If the directors grant the approval for one successive financial year, the directors may, by resolution before the end of that year, grant an approval for an additional successive year.
324DAA(5)
If the directors grant the approval for the additional successive year, subsection
324DA(1)
applies to the individual, in relation to the audit of the company, scheme or entity, as if the references in that subsection to 5 successive financial years were references to 7 successive financial years.
History
S 324DAA(5) amended by No 29 of 2023, s 3, Sch 6[132] (effective 1 July 2023).
History
S 324DAA inserted by No 72 of 2012, s 3, Sch 1, Pt 1
[
7].
SECTION 324DAB
REQUIREMENTS FOR DIRECTORS TO APPROVE EXTENSION OF ELIGIBILITY TERM
Requirements if company, scheme or entity has audit committee
324DAB(1)
If a listed company, the responsible entity of a listed registered scheme, or the RSE licensee for a registrable superannuation entity, has an audit committee:
(a)
an approval under section
324DAA
must not be granted unless it is in accordance with a recommendation provided by the audit committee; and
(b)
the resolution granting the approval must set out the reasons why the audit committee is satisfied as mentioned in paragraph
(2)(d)
of this section.
Note: Directors are not required to grant an approval merely because the audit committee has recommended that an approval be granted.
History
S 324DAB(1) amended by No 29 of 2023, s 3, Sch 6[134] (effective 1 July 2023).
324DAB(2)
An approval is taken to be made in accordance with a recommendation provided by the audit committee only if:
(a)
the approval is consistent with the audit committee
'
s recommendation; and
(b)
the recommendation is endorsed by a resolution passed by the members of the audit committee; and
(c)
the recommendation is in writing signed by a member of the audit committee on behalf of the audit committee and given to the directors of the company, scheme or entity; and
(d)
the recommendation states that the audit committee is satisfied that the approval:
(i)
is consistent with maintaining the quality of the audit provided to the company, scheme or entity; and
(ii)
would not give rise to a conflict of interest situation (as defined in section
324CD
);
and sets out the reasons why the committee is so satisfied.
History
S 324DAB(2) amended by No 29 of 2023, s 3, Sch 6[135] and
[
136] (effective 1 July 2023).
Requirements if company or scheme does not have audit committee
324DAB(3)
If a listed company, or the responsible entity of a listed registered scheme, does not have an audit committee:
(a)
an approval under section
324DAA
must not be granted unless the directors of the company or scheme are satisfied that the approval:
(i)
is consistent with maintaining the quality of the audit provided to the company or scheme; and
(ii)
would not give rise to a conflict of interest situation (as defined in section
324CD
); and
(b)
the resolution granting the approval must set out the reasons why the directors are so satisfied.
Auditor must have agreed to extension
324DAB(4)
The directors of a listed company, of a listed registered scheme or of a registrable superannuation entity, must not grant an approval under section
324DAA
unless:
(a)
if the individual to whom the approval relates does not act on behalf of an audit firm or company
-
the individual agrees, in writing, to the approval being granted; or
(b)
if the individual to whom the approval relates acts on behalf of an audit firm or company
-
the audit firm or company on whose behalf the individual acts agrees, in writing, to the approval being granted.
History
S 324DAB(4) amended by No 29 of 2023, s 3, Sch 6[137] (effective 1 July 2023).
History
S 324DAB inserted by No 72 of 2012, s 3, Sch 1, Pt 1
[
7].
SECTION 324DAC
324DAC
NOTIFICATIONS ABOUT APPROVAL TO EXTEND ELIGIBILITY TERM
If the directors of a listed company, of a listed registered scheme or of a registrable superannuation entity, grant an approval under section
324DAA
, the directors must, within 14 days of granting the approval:
(a)
lodge a copy of the resolution granting the approval with ASIC; and
(aa)
if the approval was granted by the directors of a registrable superannuation entity
-
give a copy of the resolution to APRA; and
(b)
give a copy of the resolution to:
(i)
if the individual to whom the approval relates does not act on behalf of an audit firm or company
-
the individual; and
(ii)
if the individual to whom the approval relates acts on behalf of an audit firm or company
-
the audit firm or company on whose behalf the individual acts.
Note: Details of the approval, and the reasons for the approval, must be included in the directors
'
report under section
300
or
300C
.
[
CCH Note:
S 324DAC will be amended by No 69 of 2020, s 3, Sch 1[623] and
[
624], by substituting
"
the Registrar
"
for
"
ASIC
"
in para (a) and inserting
"
Lodgement of the copy of the resolution must meet any requirements of the data standards.
"
beforethe note, (effective 1 July 2026 or a day or days to be fixed by Proclamation).]
History
S 324DAC amended by No 29 of 2023, s 3, Sch 6[138]
-
[
140] (effective 1 July 2023).
S 324DAC inserted by No 72 of 2012, s 3, Sch 1, Pt 1
[
7].
SECTION 324DAD
324DAD
APPROVAL INEFFECTIVE UNLESS IT COMPLIES WITH REQUIREMENTS
A purported grant of approval under section
324DAA
is ineffective unless the requirements of sections
324DAA
,
324DAB
and
324DAC
are complied with in relation to the approval.
History
S 324DAD inserted by No 72 of 2012, s 3, Sch 1, Pt 1
[
7] (effective 25 July 2012).
SECTION 324DB
324DB
INDIVIDUAL
'
S ROTATION OBLIGATION
An individual contravenes this section if the individual:
(a)
plays a significant role in the audit of a listed company, listed registered scheme or registrable superannuation entity for a financial year; and
(b)
is not eligible to play that role.
History
S 324DB amended by No 29 of 2023, s 3, Sch 6[141] (effective 1 July 2023).
S 324DB inserted by No 103 of 2004, s 3, Sch 1, Pt 3
[
95].
SECTION 324DC
AUDIT FIRM
'
S ROTATION OBLIGATION
Contraventions by members of audit firm
324DC(1)
A person (the
defendant
) contravenes this subsection if:
(a)
an audit firm consents to act as a listed company
'
s, listed registered scheme
'
s auditor or registrable superannuation entity
'
s auditor for a financial year; and
(b)
an individual acts, on behalf of the firm, as a lead or review auditor in relation to the audit of the company
'
s, scheme
'
s or entity
'
s financial report for that financial year; and
(c)
the individual is not eligible to play a significant role in the audit of the company, scheme or entity for that financial year; and
(d)
the defendant is a member of the firm; and
(e)
the defendant is not the individual and is or becomes aware that the individual is not eligible to play that role; and
(f)
the defendant fails to take the necessary steps, as soon as possible after the defendant becomes aware that the individual is not eligible to play that role, either:
(i)
to ensure that the audit firm resigns as auditor of the company, scheme or entity; or
(ii)
to ensure that the individual ceases to act, on behalf of the audit firm, as a lead or review auditor in relation to the audit of the company, scheme or entity for that financial year.
History
S 324DC(1) amended by No 29 of 2023, s 3, Sch 6[142]
-
[
145] (effective 1 July 2023).
324DC(2)
A person (the
defendant
) contravenes this subsection if:
(a)
an audit firm consents to act as a listed company
'
s, listed registered scheme
'
s auditor or registrable superannuation entity
'
s auditor for a financial year; and
(b)
an individual acts, on behalf of the firm, as a lead or review auditor in relation to the audit of the company
'
s, scheme
'
s or entity
'
s financial report for that financial year; and
(c)
the individual is not eligible to play a significant role in the audit of the company, scheme or entity for that financial year:
(i)
because of section
324DAD
; or
(ii)
for any other reason; and
(d)
the defendant is a member of the firm.
History
S 324DC(2) amended by No 29 of 2023, s 3, Sch 6[146]
-
[
148] (effective 1 July 2023).
S 324DC(2) amended by No 72 of 2012, s 3, Sch 1, Pt 1
[8].
324DC(3)
For the purposes of an offence based on subsection
(2)
, strict liability applies to the physical elements of the offence specified in paragraphs
(2)(a)
and
(b)
and subparagraph
(2)(c)(ii)
.
Note 1: For
strict liability
, see section 6.1 of the
Criminal Code
.
Note 2: Subsection
(4)
provides a defence.
History
S 324DC(3) amended by No 72 of 2012, s 3, Sch 1, Pt 1
[
9].
324DC(4)
A person does not commit an offence because of a contravention of subsection
(2)
in relation to an individual acting as lead or review auditor on behalf of an audit firm at a particular time if the person has reasonable grounds to believe that the audit firm had in place at that time a quality control system that provided reasonable assurance (taking into account the size and nature of the audit practice of the audit firm) that the audit firm and its employees complied with the requirements of this Division.
Note: A defendant bears an evidential burden in relation to the matters in this subsection, see subsection 13.3(3) of the
Criminal Code
.
History
S 324DC inserted by No 103 of 2004, s 3, Sch 1, Pt 3
[
95].
SECTION 324DD
AUDIT COMPANY
'
S ROTATION OBLIGATION
Contravention by audit company
324DD(1)
An audit company contravenes this subsection if:
(a)
the audit company consents to act as a listed company
'
s, listed registered scheme
'
s auditor or registrable superannuation entity
'
s auditor for a financial year; and
(b)
an individual acts, on behalf of the audit company, as a lead or review auditor in relation to the audit of the company
'
s, scheme
'
s or entity
'
s financial report for that financial year; and
(c)
the individual is not eligible to play a significant role in the audit of the company, scheme or entity for that financial year; and
(d)
a director of the audit company (other than the individual) is aware that the individual is not eligible to play that role; and
(e)
the audit company fails to take the necessary steps, as soon as possible after the director becomes aware that the individual is not eligible to play that role, either:
(i)
to resign as auditor of the company, scheme or entity; or
(ii)
to ensure that the individual ceases to act, on behalf of the audit company, as a lead or review auditor in relation to the audit of the company, scheme or entity for that financial year.
History
S 324DD(1) amended by No 29 of 2023, s 3, Sch 6[149]
-
[
152] (effective 1 July 2023).
Contraventions by directors of audit company
324DD(2)
A person (the
defendant
) contravenes this subsection if:
(a)
an audit company consents to act as a listed company
'
s, listed registered scheme
'
s auditor or registrable superannuation entity
'
s auditor for a financial year; and
(b)
an individual acts, on behalf of the audit company, as a lead or review auditor in relation to the audit of the company
'
s, scheme
'
s or entity
'
s financial report for that financial year; and
(c)
the individual is not eligible to play a significant role in the audit of the company, scheme or entity for that financial year; and
(d)
the defendant is a director of the audit company; and
(e)
the defendant is not the individual and is or becomes aware that the individual is not eligible to play that role; and
(f)
the defendant fails to take the necessary steps, as soon as possible after the defendant becomes aware that the individual is not eligible to play that role, either:
(i)
to ensure that the audit company resigns as auditor of the company, scheme or entity; or
(ii)
to ensure that the individual ceases to act, on behalf of the audit company, as a lead or review auditor in relation to the audit of the company, scheme or entity for that financial year.
History
S 324DD(2) amended by No 29 of 2023, s 3, Sch 6[153]
-
[
156] (effective 1 July 2023).
324DD(3)
A person (the
defendant
) contravenes this subsection if:
(a)
an audit company consents to act as a listed company
'
s, listed registered scheme
'
s auditor or registrable superannuation entity
'
s auditor for a financial year; and
(b)
an individual acts, on behalf of the audit company, as a lead or review auditor in relation to the audit of the company
'
s, scheme
'
s or entity
'
s financial report for that financial year; and
(c)
the individual is not eligible to play a significant role in the audit of the company, scheme or entity for that financial year:
(i)
because of section
324DAD
; or
(ii)
for any other reason; and
(d)
the defendant is a director of the audit company.
History
S 324DD(3) amended by No 29 of 2023, s 3, Sch 6[157]
-
[
159] (effective 1 July 2023).
S 324DD(3) amended by No 72 of 2012, s 3, Sch 1, Pt 1
[
10].
324DD(4)
For the purposes of an offence based on subsection
(3)
, strict liability applies to the physical elements of the offence specified in paragraphs
(3)(a)
and
(b)
and subparagraph
(3)(c)(ii)
.
Note 1: For
strict liability
, see section 6.1 of the
Criminal Code
.
Note 2: Subsection
(5)
provides a defence.
History
S 324DD(4) amended by No 72 of 2012, s 3, Sch 1, Pt 1
[
11].
324DD(5)
A person does not commit an offence because of a contravention of subsection
(3)
in relation to an individual acting as lead or review auditor on behalf of an audit company at a particular time if the person has reasonable grounds to believe that the audit company had in place at that time a quality control system that provided reasonable assurance (taking into account the size and nature of the audit practice of the audit company) that the audit company and its employees complied with the requirements of this Division.
Note: A defendant bears an evidential burden in relation to the matters in this subsection, see subsection 13.3(3) of the
Criminal Code
.
History
S 324DD inserted by No 103 of 2004, s 3, Sch 1, Pt 3
[
95].
Division 6
-
Appointment, removal and fees of auditors for companies
Note: This Division does not apply in relation to a CCIV. Instead, section
1232R
applies a modified version of Division
7
to a retail CCIV.
History
Div 6 amended by No 8 of 2022, s 3, Sch 2[135] (effective 1 July 2022).
Div 6 heading inserted by No 103 of 2004, s 3, Sch 1, Pt 3
[
95].
Subdivision A
-
Appointment of company auditors
History
Subdiv A heading inserted by No 103 of 2004, s 3, Sch 1, Pt 3
[
95].
SECTION 325
APPOINTMENT OF AUDITOR BY PROPRIETARY COMPANY
325(1)
The directors of a proprietary company may appoint an auditor for the company if an auditor has not been appointed by the company in general meeting.
History
S 325(1) formerly s 325 amended by No 106 of 2018, s 3, Sch 1
[
30] (effective 19 October 2018).
325(2)
The directors of a proprietary company must ensure that there is an auditor for the company at all times during the period:
(a)
starting 1 month after:
(i)
the time the company first raises a total equal to or exceeding the CSF audit threshold from all the CSF offers it has ever made; or
(ii)
if the period starting because of subparagraph (i), or because of an earlier operation of this subparagraph, has ended
-
the time the company makes a later CSF offer; and
(b)
when the company ceases to have any CSF shareholders at a later time in a particular financial year
-
ending when the company
'
s financial report for that financial year has been audited.
History
S 325(2) inserted by No 106 of 2018, s 3, Sch 1
[
31] (effective 19 October 2018).
325(3)
However, subsection (2) does not apply for any period of 1 month or less starting when a vacancy occurs in the office of auditor of the company (however that vacancy is caused).
History
S 325(3) inserted by No 106 of 2018, s 3, Sch 1
[
31] (effective 19 October 2018).
325(4)
A director of a company must take all reasonable steps to comply with, or to secure compliance with, subsection (2).
History
S 325(4) inserted by No 106 of 2018, s 3, Sch 1
[
31] (effective 19 October 2018).
[
CCH Note:
There is no section 326.]
SECTION 327
327
APPOINTMENT OF AUDITORS
(Repealed by No 103 of 2004, s 3, Sch 1, Pt 3
[
96] (effective 1 July 2004).)
SECTION 327A
PUBLIC COMPANY AUDITOR (INITIAL APPOINTMENT OF AUDITOR)
327A(1)
The directors of a public company must appoint an auditor of the company within 1 month after the day on which a company is registered as a company unless the company at a general meeting has appointed an auditor.
327A(1A)
Subsection (1) does not apply in relation to a company if:
(a)
the directors reasonably believe that subsection
301(3)
will apply to the company
'
s financial reports; or
(b)
the company is a small company limited by guarantee; or
(c)
the company is covered under section
738ZI
just after it is registered as a company.
History
S 327A(1A) amended by No 17 of 2017, s 3, Sch 2
[
17] (effective 28 September 2017).
S 327A(1A) inserted by No 19 of 2015, s 3, Sch 1[7] (effective 19 March 2015).
327A(2)
Subject to this Part, an auditor appointed under subsection (1) holds office until the company's first AGM.
327A(3)
A director of a company must take all reasonable steps to comply with, or to secure compliance with, subsection (1).
History
S 327A inserted by No 103 of 2004, s 3, Sch 1, Pt 3
[
96].
SECTION 327B
PUBLIC COMPANY AUDITOR (ANNUAL APPOINTMENTS AT AGMs TO FILL VACANCIES)
327B(1)
A public company must:
(a)
appoint an auditor of the company at its first AGM; and
(b)
appoint an auditor of the company to fill any vacancy in the office of auditor at each subsequent AGM.
History
S 327B(1) inserted by No 103 of 2004, s 3, Sch 1, Pt 3
[
96].
327B(1A)
Subsection (1) does not apply in relation to a company if:
(a)
subsection
301(3)
applies to the company
'
s financial reports; or
(b)
the company is a small company limited by guarantee.
History
S 327B(1A) inserted by No 19 of 2015, s 3, Sch 1[8] (effective 19 March 2015).
327B(2)
An auditor appointed under subsection (1) holds office until the auditor:
(a)
dies; or
(b)
is removed, or resigns, from office in accordance with section
329
; or
(c)
ceases to be capable of acting as auditor because of Division
2
of this Part; or
(d)
ceases to be auditor under subsection (2A), (2B) or (2C).
History
S 327B(2) inserted by No 103 of 2004, s 3, Sch 1, Pt 3
[
96].
327B(2A)
An individual auditor ceases to be auditor of a company under this subsection if:
(a)
on a particular day (the
start day
), the individual auditor:
(i)
informs ASIC of a conflict of interest situation in relation to the company under subsection
324CA(1A)
; or
(ii)
informs ASIC of particular circumstances in relation to the company under subsection
324CE(1A)
; and
(b)
the individual auditor does not give ASIC a notice, before the notification day (see subsection (2D)), that that conflict of interest situation has, or those circumstances have, ceased to exist before the end of the period (the
remedial period
) of 21 days, or such longer period as ASIC approves in writing, from the start day.
History
S 327B(2A) amended by No 101 of 2007, s 3, Sch 1, Pt 1
[
63].
S 327B(2A) inserted by No 103 of 2004, s 3, Sch 1, Pt 3
[
96].
[
CCH Note:
Act No 101 of 2007, Sch 1, Pt 6
[
236] contained the following application provision (which was effective 28 June 2007):
Application of items 63 and 64
The amendments made by items 63 and 64 of this Schedule apply in relation to information given to ASIC under subsection 327B(2A), (2B) or (2C), or 331AAA(2A), (2B) or (2C), of the Corporations Act 2001 on or after the day on which that item commences.
]
327B(2B)
An audit firm ceases to be auditor of a company under this subsection if:
(a)
on a particular day (the
start day
), ASIC is:
(i)
informed of a conflict of interest situation in relation to the company under subsection
324CB(1A)
; or
(ii)
informed of particular circumstances in relation to the company under subsection
324CF(1A)
; and
(b)
ASIC has not been given a notice on behalf of the audit firm, before the notification day (see subsection (2D)), that that conflict of interest situation has, or those circumstances have, ceased to exist before the end of the period (the
remedial period
) of 21 days, or such longer period as ASIC approves in writing, from the start day.
History
S 327B(2B) amended by No 101 of 2007, s 3, Sch 1, Pt 1
[
63].
S 327B(2B) inserted by No 103 of 2004, s 3, Sch 1, Pt 3
[
96].
[
CCH Note:
Act No 101 of 2007, Sch 1, Pt 6
[
236] contained the following application provision (which was effective 28 June 2007):
Application of items 63 and 64
The amendments made by items 63 and 64 of this Schedule apply in relation to information given to ASIC under subsection 327B(2A), (2B) or (2C), or 331AAA(2A), (2B) or (2C), of the Corporations Act 2001 on or after the day on which that item commences.
]
327B(2C)
An audit company ceases to be auditor of a company under this subsection if:
(a)
on a particular day (the
start day
), ASIC is:
(i)
informed of a conflict of interest situation in relation to the company under subsection
324CB(1A)
or
324CC(1A)
; or
(ii)
informed of particular circumstances in relation to the company under subsection
324CF(1A)
or
324CG(1A)
or
(5A)
; and
(b)
ASIC has not been given a notice on behalf of the audit company, before the notification day (see subsection (2D)), that that conflict of interest situation has, or those circumstances have, ceased to exist before the end of the period (the
remedial period
) of 21 days, or such longer period as ASIC approves in writing, from the start day.
History
S 327B(2C) amended by No 101 of 2007, s 3, Sch 1, Pt 1
[
63].
S 327B(2C) inserted by No 103 of 2004, s 3, Sch 1, Pt 3
[
96].
[
CCH Note:
Act No 101 of 2007, Sch 1, Pt 6
[
236] contained the following application provision (which was effective 28 June 2007):
Application of items 63 and 64
The amendments made by items 63 and 64 of this Schedule apply in relation to information given to ASIC under subsection 327B(2A), (2B) or (2C), or 331AAA(2A), (2B) or (2C), of the Corporations Act 2001 on or after the day on which that item commences.
]
327B(2D)
The
notification day
is:
(a)
the last day of the remedial period; or
(b)
such later day as ASIC approves in writing (whether before or after the remedial period ends).
History
S 327B(2D) inserted by No 103 of 2004, s 3, Sch 1, Pt 3
[
96].
327B(3)
A director of a company must take all reasonable steps to comply with, or to secure compliance with, subsection (1).
History
S 327B(3) inserted by No 103 of 2004, s 3, Sch 1, Pt 3
[
96].
327B(4)
If an audit firm ceases to be the auditor of a company under subsection (2) at a particular time, each member of the firm who:
(a)
is taken to have been appointed as an auditor of the company under subsection
324AB(1)
or
324AC(4)
; and
(b)
is an auditor of the company immediately before that time;
ceases to be an auditor of the company at that time.
History
S 327B(4) inserted by No 103 of 2004, s 3, Sch 1, Pt 3
[
96].
SECTION 327C
PUBLIC COMPANY AUDITOR (APPOINTMENT TO FILL CASUAL VACANCY)
327C(1)
If:
(a)
a vacancy occurs in the office of auditor of a public company; and
(b)
the vacancy is not caused by the removal of an auditor from office; and
(c)
there is no surviving or continuing auditor of the company;
the directors must, within 1 month after the vacancy occurs, appoint an auditor to fill the vacancy unless the company at a general meeting has appointed an auditor to fill the vacancy.
Note: Certain public companies are not required to appoint an auditor: see subsections
327A(1A)
and
327B(1A)
.
History
S 327C(1) amended by No 19 of 2015, s 3, Sch 1[9] (effective 19 March 2015).
327C(2)
An auditor appointed under subsection (1) holds office, subject to this Part, until the company's next AGM.
327C(3)
A director of a public company must take all reasonable steps to comply with, or to secure compliance with, subsection (1).
History
S 327C inserted by No 103 of 2004, s 3, Sch 1, Pt 3
[
96].
SECTION 327D
APPOINTMENT TO REPLACE AUDITOR REMOVED FROM OFFICE
327D(1)
[
Application]
This section deals with the situation in which an auditor of a company is removed from office at a general meeting in accordance with section
329
.
327D(2)
[
Special resolution to appoint]
The company may at that general meeting (without adjournment), by special resolution immediately appoint an individual, firm or company as auditor of the company if a copy of the notice of nomination has been sent to the individual, firm or company under subsection
328B(3)
.
327D(3)
[
Ordinary resolution to appoint]
If a special resolution under subsection (2):
(a)
is not passed; or
(b)
could not be passed merely because a copy of the notice of nomination has not been sent to an individual, firm or company under subsection
328B(3)
;
the general meeting may be adjourned and the company may, at the adjourned meeting, by ordinary resolution appoint an individual, firm or company as auditor of the company if:
(c)
a member of the company gives the company notice of the nomination of the individual, firm or company for appointment as auditor; and
(d)
the company receives the notice at least 14 clear days before the day to which the meeting is adjourned.
327D(4)
[
Adjourned meeting]
The day to which the meeting is adjourned must be:
(a)
not earlier than 20 days after the day of the meeting; and
(b)
not later than 30 days after the day of the meeting.
327D(5)
[
Tenure]
Subject to this Part, an auditor appointed under subsection (2) or (3) holds office until the company's next AGM.
History
S 327D inserted by No 103 of 2004, s 3, Sch 1, Pt 3
[
96] (effective 1 July 2004).
SECTION 327E
ASIC MAY APPOINT A COMPANY AUDITOR IF AUDITOR REMOVED BUT NOT REPLACED
327E(1)
This section applies if:
(a)
the directors of a proprietary company fail to appoint an auditor under subsection
325(2)
; or
(b)
a public company fails to appoint an auditor under subsection
327D(2)
or (3).
The failure is referred to as the
auditor replacement failure
.
History
S 327E(1) substituted by No 106 of 2018, s 3, Sch 1
[
33] (effective 19 October 2018).
327E(2)
The company must give ASIC written notice of the auditor replacement failure within the period of 7 days commencing on the day of the auditor replacement failure (the
notification period
).
327E(3)
If the company gives ASIC the notice required by subsection (2), ASIC must appoint an auditor of the company as soon as practicable after receiving the notice. This subsection has effect subject to section
327G
.
327E(4)
If the company does not give ASIC the notice required by subsection (2), ASIC may appoint an auditor of the company at any time:
(a)
after the end of the notification period; and
(b)
before ASIC receives notice of the auditor replacement failure from the company.
This subsection has effect subject to section
327G
.
327E(5)
If the company:
(a)
does not give ASIC the notice required by subsection (2); and
(b)
gives ASIC notice of the auditor replacement failure after the end of the notification period;
ASIC must appoint an auditor of the company as soon as practicable after receiving the notice. This subsection has effect subject to section
327G
.
327E(6)
Subject to this Part, an auditor appointed under this section holds office until:
(a)
for a proprietary company
-
the company
'
s next general meeting; or
(b)
for a public company
-
the company
'
s next AGM.
History
S 327E(6) substituted by No 106 of 2018, s 3, Sch 1
[
34] (effective 19 October 2018).
History
S 327E inserted by No 103 of 2004, s 3, Sch 1, Pt 3
[
96].
SECTION 327F
ASIC
'
S GENERAL POWER TO APPOINT A COMPANY AUDITOR
327F(1)
ASIC may appoint an auditor of a public company, or of a proprietary company that has one or more CSF shareholders, if:
(a)
the company or its directors fail to appoint an auditor when required by this Act to do so; and
(b)
a member of the company applies to ASIC in writing for the appointment of an auditor under this section.
This subsection has effect subject to section
327G
.
History
S 327F(1) amended by No 106 of 2018, s 3, Sch 1
[
36-37] (effective 19 October 2018).
327F(2)
Subject to this Part, an auditor appointed under this section holds office until:
(a)
for a proprietary company
-
the company
'
s next general meeting; or
(b)
for a public company
-
the company
'
s next AGM.
History
S 327F(2) substituted by No 106 of 2018, s 3, Sch 1
[
38] (effective 19 October 2018).
SECTION 327G
RESTRICTIONS ON ASIC
'
S POWERS TO APPOINT A COMPANY AUDITOR
327G(1)
ASIC may appoint an individual, firm or company as auditor of a company under section
327E
or
327F
only if the individual, firm or company consents to being appointed.
327G(2)
ASIC must not appoint an auditor of a company under section
327E
or
327F
if:
(a)
there is another auditor of the company (the
continuing auditor
); and
(b)
ASIC is satisfied that the continuing auditor is able to carry out the responsibilities of auditor alone; and
(c)
the continuing auditor agrees to continue as auditor.
327G(3)
ASIC must not appoint an auditor of a company under section
327E
or
327F
if:
(a)
the company does not give ASIC the notice required by subsection
327E(2)
before the end of the notification period; and
(b)
ASIC has already appointed an auditor of the company under section
327E
after the end of the notification period.
History
S 327G inserted by No 103 of 2004, s 3, Sch 1, Pt 3
[
96].
SECTION 327H
327H
EFFECT ON APPOINTMENT OF PUBLIC COMPANY AUDITOR OF COMPANY BEGINNING TO BE CONTROLLED BY A CORPORATION
An auditor of a public company that begins to be controlled by a corporation:
(a)
must retire at the AGM of the company next held after the company begins to be controlled by the corporation unless the auditor vacates that office before then; and
(b)
is, subject to this Part, eligible for re-appointment.
This section has effect notwithstanding subsection
327B(2)
.
History
S 327H inserted by No 103 of 2004, s 3, Sch 1, Pt 3
[
96] (effective 1 July 2004).
SECTION 327I
327I
REMAINING AUDITORS MAY ACT DURING VACANCY
While a vacancy in the office of auditor of a company continues, the surviving or continuing auditor or auditors (if any) may act as auditors of the company.
History
S 327I inserted by No 103 of 2004, s 3, Sch 1, Pt 3
[
96] (effective 1 July 2004).
SECTION 328
328
NOMINATION OF AUDITORS
(Repealed by No 103 of 2004, s 3, Sch 1, Pt 3
[
96] (effective 1 July 2004).)
SECTION 328A
AUDITOR
'
S CONSENT TO APPOINTMENT
328A(1)
A company, the directors of a company or the responsible entity of a registered scheme must not appoint an individual, firm or company as auditor of the company unless that individual, firm or company:
(a)
has consented, before the appointment, to act as auditor; and
(b)
has not withdrawn that consent before the appointment is made.
For the purposes of this section, a consent, or the withdrawal of a consent, must be given by written notice to the company, the directors or the responsible entity of the scheme.
328A(2)
A notice under subsection
(1)
given by a firm must be signed by a member of the firm who is a registered company auditor both:
(a)
in the firm name; and
(b)
in his or her own name.
328A(3)
A notice under subsection
(1)
given by a company must be signed by a director or senior manager of the company both:
(a)
in the company
'
s name; and
(b)
in his or her own name.
328A(4)
If a company, the directors of a company or the responsible entity of a registered scheme appoints an individual, firm or company as auditor of a company in contravention of subsection
(1)
:
(a)
the purported appointment does not have any effect; and
(b)
the company or responsible entity, and any officer of the company or responsible entity who is in default, are each guilty of an offence.
History
S 328A(4) amended by No 180 of 2012, s 3, Sch 1[15] (effective 11 December 2012).
[
CCH Note:
Act No 180 of 2012, s 3, Sch 7[1] contained the following application provision (which was effective 11 December 2012):
Application of amendments made by this Act
The amendments made by this Act apply in relation to an act or omission by a body corporate occurring on or after the day this Act commences.]
Note: An officer of a company, or of a responsible entity, is in default if the officer is involved in the contravention of subsection
(1)
by the company, the company
'
s directors or the entity: see the definitions of
in default
and
involved
in section
9
.
History
S 328A (note) amended by No 76 of 2023, s 3, Sch 2[76] (effective 20 October 2023).
S 328A inserted by No 103 of 2004, s 3, Sch 1, Pt 3
[
96].
SECTION 328B
NOMINATION OF AUDITOR
328B(1)
Subject to this section, a company may appoint an individual, firm or company as auditor of the company at its AGM only if a member of the company gives the company written notice of the nomination of the individual, firm or company for appointment as auditor:
(a)
before the meeting was convened; or
(b)
not less than 21 days before the meeting.
This subsection does not apply if an auditor is removed from office at the AGM.
328B(2)
If a company purports to appoint an individual, firm or company as auditor of the company in contravention of subsection
(1)
:
(a)
the purported appointment is of no effect; and
(b)
the company and any officer of the company who is in default are each guilty of an offence.
Note: An officer of a company is in default if the officer is involved in the company
'
s contravention of subsection
(1)
: see the definitions of
in default
and
involved
in section
9
.
History
S 328B(2) amended by No 76 of 2023, s 3, Sch 2[77] (effective 20 October 2023).
S 328B(2) amended by No 180 of 2012, s 3, Sch 1[16] (effective 11 December 2012).
[
CCH Note:
Act No 180 of 2012, s 3, Sch 7[1] contained the following application provision (which was effective 11 December 2012):
Application of amendments made by this Act
The amendments made by this Act apply in relation to an act or omission by a body corporate occurring on or after the day this Act commences.
]
328B(3)
If a member gives a company notice of the nomination of an individual, firm or company for appointment as auditor of the company, the company must send a copy of the notice to:
(a)
each individual, firm or company nominated; and
(b)
each auditor of the company; and
(c)
each person entitled to receive notice of general meetings of the company.
This is so whether the appointment is to be made at a meeting or an adjourned meeting referred to in section
327D
or at an AGM.
328B(4)
The copy of the notice of nomination must be sent:
(a)
not less than 7 days before the meeting; or
(b)
at the time notice of the meeting is given.
History
S 328B inserted by No 103 of 2004, s 3, Sch 1, Pt 3
[
96].
SECTION 328C
PUBLIC COMPANY AUDITOR (APPOINTMENT OF AUDITOR WHEN CROWD-SOURCED FUNDING CONCESSION ENDS)
328C(1)
If a public company stops being covered under section
738ZI
at a time, the directors of the company must appoint an auditor of the company within 1 month after that time, unless the company at a general meeting has appointed an auditor.
328C(2)
An auditor appointed under subsection (1) holds office until the company
'
s first AGM.
328C(3)
A director of a company must take all reasonable steps to comply with, or to secure compliance with, subsection (1).
History
S 328C inserted by No 17 of 2017, s 3, Sch 2
[
18] (effective 28 September 2017).
SECTION 328D
PUBLIC COMPANY AUDITOR (APPOINTMENT OF AUDITOR WHEN $3 MILLION RAISED USING CROWD-SOURCED FUNDING)
328D(1)
If the directors of a public company that is covered under section
738ZI
become aware that the company has raised $3 million or more from all CSF offers, the directors of the company must appoint an auditor of the company within 1 month after becoming so aware, unless the company at a general meeting has appointed an auditor.
History
S 328D(1) amended by No 106 of 2018, s 3, Sch 1
[
49] (effective 22 September 2018).
328D(2)
An auditor appointed under subsection (1) holds office in accordance with section
328E
.
328D(3)
A director of a company must take all reasonable steps to comply with, or to secure compliance with, subsection (1).
History
S 328D inserted by No 17 of 2017, s 3, Sch 2
[
18] (effective 28 September 2017).
SECTION 328E
CROWD-SOURCED FUNDING
-
PERIOD OF OFFICE
328E(1)
This section applies to an auditor appointed as auditor of a company, if the company was covered under section
738ZI
at the time the auditor was appointed.
Note: This section applies to an auditor appointed under section
327C
,
327D
,
327E
,
327F
or
328D
if the company was covered under section
738ZI
at the time the auditor was appointed.
328E(2)
The auditor holds office until the auditor:
(a)
dies; or
(b)
is removed, or resigns, from office in accordance with section
329
; or
(c)
ceases to be capable of acting as auditor because of Division 2 of this Part; or
(d)
ceases to be auditor under subsection (3), (4) or (5);
unless the company
'
s first AGM occurs first.
328E(3)
An individual auditor ceases to be auditor of a company under this subsection if:
(a)
on a particular day (the
start day
), the individual auditor:
(i)
informs ASIC of a conflict of interest situation in relation to the company under subsection
324CA(1A)
; or
(ii)
informs ASIC of particular circumstances in relation to the company under subsection
324CE(1A)
; and
(b)
the individual auditor does not give ASIC a notice, before the notification day (see subsection (6) of this section), that that conflict of interest situation has, or those circumstances have, ceased to exist before the end of the period (the
remedial period
) of 21 days, or such longer period as ASIC approves in writing, from the start day.
328E(4)
An audit firm ceases to be auditor of a company under this subsection if:
(a)
on a particular day (the
start day
), ASIC is:
(i)
informed of a conflict of interest situation in relation to the company under subsection
324CB(1A)
; or
(ii)
informed of particular circumstances in relation to the company under subsection
324CF(1A)
; and
(b)
ASIC has not been given a notice on behalf of the audit firm, before the notification day (see subsection (6) of this section), that that conflict of interest situation has, or those circumstances have, ceased to exist before the end of the period (the
remedial period
) of 21 days, or such longer period as ASIC approves in writing, from the start day.
328E(5)
An audit company ceases to be auditor of a company under this subsection if:
(a)
on a particular day (the
start day
), ASIC is:
(i)
informed of a conflict of interest situation in relation to the company under subsection
324CB(1A)
or
324CC(1A)
; or
(ii)
informed of particular circumstances in relation to the company under subsection
324CF(1A)
or
324CG(1A)
or
(5A)
; and
(b)
ASIC has not been given a notice on behalf of the audit company, before the notification day (see subsection (6) of this section), that that conflict of interest situation has, or those circumstances have, ceased to exist before the end of the period (the
remedial period
) of 21 days, or such longer period as ASIC approves in writing, from the start day.
328E(6)
The
notification day
is:
(a)
the last day of the remedial period; or
(b)
such later day as ASIC approves in writing (whether before or after the remedial period ends).
328E(7)
If an audit firm ceases to be the auditor of a company under subsection (2) at a particular time, each member of the firm who:
(a)
is taken to have been appointed as an auditor of the company under subsection
324AB(1)
or
324AC(4)
; and
(b)
is an auditor of the company immediately before that time;
ceases to be an auditor of the company at that time.
History
S 328E inserted by No 17 of 2017, s 3, Sch 2
[
18] (effective 28 September 2017).
Subdivision B
-
Removal and resignation of company auditors
History
Subdiv B heading inserted by No 103 of 2004, s 3, Sch 1, Pt 3
[
96] (effective 1 July 2004).
SECTION 329
REMOVAL AND RESIGNATION OF AUDITORS
329(1)
An auditor of a company may be removed from office by resolution of the company at a general meeting of which notice under subsection
(1A)
has been given, but not otherwise.
329(1A)
Notice of intention to move the resolution must be given to the company at least 2 months before the meeting is to be held. However, if the company calls a meeting after the notice of intention is given under this subsection, the meeting may pass the resolution even though the meeting is held less than 2 months after the notice of intention is given.
Note: Short notice of the meeting cannot be given for this resolution (see subsection
249H(4)
).
329(2)
Where notice under subsection
(1A)
of a resolution to remove an auditor is received by a company, it must as soon as possible send a copy of the notice to the auditor and lodge a copy of the notice.
[
CCH Note:
S 329(2) will be amended by No 69 of 2020, s 3, Sch 1[625], by inserting
"
with the Registrar. The lodgement must meet any requirements of the data standards.
"
at the end, (effective 1 July 2026 or a day or days to be fixed by Proclamation).]
329(3)
Within 7 days after receiving a copy of the notice, the auditor may make representations in writing, not exceeding a reasonable length, to the company and request that, before the meeting at which the resolution is to be considered, a copy of the representations be sent by the company at its expense to every member of the company to whom notice of the meeting is sent.
329(4)
Unless ASIC on the application of the company otherwise orders, the company must send a copy of the representations in accordance with the auditor
'
s request, and the auditor may, without prejudice to his or her right to be heard orally or, where a firm is the auditor, to have a member of the firm heard orally on its behalf, require that the representations be read out at the meeting.
329(5)
An auditor of a company may, by notice in writing given to the company, resign as auditor of the company if:
(a)
the auditor has, by notice in writing given to ASIC, applied for consent to the resignation and stated the reasons for the application and, at or about the same time as the notice was given to ASIC, notified the company in writing of the application to ASIC; and
(b)
the consent of ASIC has been given.
329(6)
ASIC must, as soon as practicable after receiving a notice from an auditor under subsection
(5)
, notify the auditor and the company whether it consents to the resignation of the auditor.
329(7)
A statement made by an auditor in an application to ASIC under subsection
(5)
or in answer to an inquiry by ASIC relating to the reasons for the application:
(a)
is not admissible in evidence in any civil or criminal proceedings against the auditor; and
(b)
may not be made the ground of a prosecution, action or suit against the auditor;
and a certificate by ASIC that the statement was made in the application or in the answer to the inquiry by ASIC is conclusive evidence that the statement was so made.
329(8)
Subject to subsection
(9)
, the resignation of an auditor takes effect:
(a)
on the day (if any) specified for the purpose in the notice of resignation; or
(b)
on the day on which ASIC gives its consent to the resignation; or
(c)
on the day (if any) fixed by ASIC for the purpose;
whichever last occurs.
329(9)
The resignation of an auditor of a proprietary company or a small company limited by guarantee does not require the consent of ASIC under subsection
(5)
, and takes effect:
(a)
on the day (if any) specified for the purpose in the notice of resignation; or
(b)
on the day on which the notice is received by the company;
whichever is the later.
History
S 329(9) amended by No 66 of 2010, s 3, Sch 1, Pt 1
[
47].
329(10)
Where on the retirement or withdrawal from a firm of a member the firm will no longer be capable, by reason of the provisions of subparagraph
324BB(1)(b)(i)
or
(2)(b)(i)
of acting as auditor of a company, the member so retiring or withdrawing is (if not disqualified from acting as auditor of the company) taken to be the auditor of the company until he or she obtains the consent of ASIC to his or her retirement or withdrawal.
History
S 329(10) amended by No 103 of 2004, s 3, Sch 1, Pt 3
[
97].
329(11)
Within 14 days after:
(a)
the removal from office of an auditor of a company; or
(b)
the receipt of a notice of resignation from an auditor of a company;
the company must:
(c)
lodge with ASIC a notice of the removal or resignation in the prescribed form; and
(d)
where there is a trustee for the holders of debentures of the company
-
give to the trustee a copy of the notice lodged with ASIC.
[
CCH Note 1:
S 329(11) will be amended by No 69 of 2020, s 3, Sch 1[626]
-
[
628], by substituting
"
the Registrar
"
for
"
ASIC
"
in para (c) and (d) and omitting
"
in the prescribed form
"
in para (c) (effective 1 July 2026 or a day or days to be fixed by Proclamation).]
[
CCH Note 2:
S 329(12) will be inserted by No 69 of 2020, s 3, Sch 1[629] (effective 1 July 2026 or a day or days to be fixed by Proclamation). S 329(12) will read:
329(12)
The notice must meet any requirements of the data standards.]
SECTION 330
330
EFFECT OF WINDING UP ON OFFICE OF AUDITOR
An auditor of a company ceases to hold office if:
(a)
a special resolution is passed for the voluntary winding up of the company; or
(b)
in a case to which paragraph (a) does not apply
-
an order is made by the Court for the winding up of the company.
Subdivision C
-
Company auditors' fees and expenses
History
Subdiv C heading inserted by No 103 of 2004, s 3, Sch 1, Pt 3
[
98] (effective 1 July 2004).
SECTION 331
331
FEES AND EXPENSES OF AUDITORS
The reasonable fees and expenses of an auditor of a company are payable by the company.
Division 7
-
Appointment, removal and fees of auditorsfor registered schemes
Note: Section
1232R
applies a modified version of this Division in relation to a retail CCIV.
History
Div 7 amended by No 8 of 2022, s 3, Sch 2[136] (effective 1 July 2022).
Div 7 renumbered by No 103 of 2004, s 3, Sch 1, Pt 3
[
99].
Subdivision A
-
Appointment of registered scheme auditors
History
Subdiv A heading inserted by No 103 of 2004, s 3, Sch 1, Pt 3
[
99] (effective 1 July 2004).
SECTION 331AA
331AA
QUALIFICATIONS OF AUDITORS
(Repealed by No 103 of 2004, s 3, Sch 1, Pt 3
[
100] (effective 1 July 2004).)
SECTION 331AB
331AB
APPOINTMENT OF AUDITORS
(Repealed by No 103 of 2004, s 3, Sch 1, Pt 3
[
100] (effective 1 July 2004).)
SECTION 331AAA
REGISTERED SCHEME AUDITOR (INITIAL APPOINTMENT OF AUDITOR)
331AAA(1)
[
Time limit to appoint]
The responsible entity of a registered scheme must appoint an auditor of the registered scheme within 1 month after the day on which the scheme is registered.
History
S 331AAA(1) inserted by No 103 of 2004, s 3, Sch 1, Pt 3
[
100] (effective 1 July 2004).
331AAA(2)
[
Tenure]
An auditor appointed under subsection (1) holds office until the auditor:
(a)
dies; or
(b)
is removed, or resigns, from office in accordance with section
331AC
; or
(c)
ceases to be capable of acting as an auditor because of Division
2
of this Part; or
(d)
ceases to be auditor under subsection (2A), (2B) or (2C).
History
S 331AAA(2) inserted by No 103 of 2004, s 3, Sch 1, Pt 3
[
100] (effective 1 July 2004).
331AAA(2A)
[
Cessation
-
individual auditor]
An individual auditor ceases to be auditor of a registered scheme under this subsection if:
(a)
on a particular day (the
start day
), the individual auditor:
(i)
informs ASIC of a conflict of interest situation in relation to the scheme under subsection
324CA(1A)
; or
(ii)
informs ASIC of particular circumstances in relation to the scheme under subsection
324CE(1A)
; and
(b)
the individual auditor does not give ASIC a notice, before the notification day (see subsection (2D)), that that conflict of interest situation has, or those circumstances have, ceased to exist before the end of the period (the
remedial period
) of 21 days, or such longer period as ASIC approves in writing, from the start day.
History
S 331AAA(2A) amended by No 101 of 2007, s 3, Sch 1, Pt 1
[
64] (effective 28 June 2007).
S 331AAA(2A) inserted by No 103 of 2004, s 3, Sch 1, Pt 3
[
100] (effective 1 July 2004).
[
CCH Note:
Act No 101 of 2007, Sch 1, Pt 6
[
236] contained the following application provision (which was effective 28 June 2007):
Application of items 63 and 64
The amendments made by items 63 and 64 of this Schedule apply in relation to information given to ASIC under subsection 327B(2A), (2B) or (2C), or 331AAA(2A), (2B) or (2C), of the Corporations Act 2001 on or after the day on which that item commences.
]
331AAA(2B)
[
Cessation
-
audit firm]
An audit firm ceases to be auditor of a registered scheme under this subsection if:
(a)
on a particular day (the
start day
), ASIC is:
(i)
informed of a conflict of interest situation in relation to the scheme under subsection
324CB(1A)
; or
(ii)
informed of particular circumstances in relation to the scheme under subsection
324CF(1A)
; and
(b)
ASIC has not been given a notice on behalf of the audit firm, before the notification day (see subsection (2D)), that that conflict of interest situation has, or those circumstances have, ceased to exist before the end of the period (the
remedial period
) of 21 days, or such longer period as ASIC approves in writing, from the start day.
History
S 331AAA(2B) amended by No 101 of 2007, s 3, Sch 1, Pt 1
[
64] (effective 28 June 2007).
S 331AAA(2B) inserted by No 103 of 2004, s 3, Sch 1, Pt 3
[
100] (effective 1 July 2004).
[
CCH Note:
Act No 101 of 2007, Sch 1, Pt 6
[
236] contained the following application provision (which was effective 28 June 2007):
Application of items 63 and 64
The amendments made by items 63 and 64 of this Schedule apply in relation to information given to ASIC under subsection 327B(2A), (2B) or (2C), or 331AAA(2A), (2B) or (2C), of the Corporations Act 2001 on or after the day on which that item commences.
]
331AAA(2C)
[
Cessation
-
audit company]
An audit company ceases to be auditor of a registered scheme under this subsection if:
(a)
on a particular day (the
start day
), ASIC is:
(i)
informed of a conflict of interest situation in relation to the scheme under subsection
324CB(1A)
or
324CC(1A)
; or
(ii)
informed of particular circumstances in relation to the scheme under subsection
324CF(1A)
or
324CG(1A)
or
(5A)
; and
(b)
ASIC has not been given a notice on behalf of the audit company, before the notification day (see subsection (2D)), that that conflict of interest situation has, or those circumstances have, ceased to exist before the end of the period (the
remedial period
) of 21 days, or such longer period as ASIC approves in writing, from the start day.
History
S 331AAA(2C) amended by No 101 of 2007, s 3, Sch 1, Pt 1
[
64] (effective 28 June 2007).
S 331AAA(2C) inserted by No 103 of 2004, s 3, Sch 1, Pt 3
[
100] (effective 1 July 2004).
[
CCH Note:
Act No 101 of 2007, Sch 1, Pt 6
[
236] contained the following application provision (which was effective 28 June 2007):
Application of items 63 and 64
The amendments made by items 63 and 64 of this Schedule apply in relation to information given to ASIC under subsection 327B(2A), (2B) or (2C), or 331AAA(2A), (2B) or (2C), of the Corporations Act 2001 on or after the day on which that item commences.
]
331AAA(2D)
[
"
notification day
"
]
The
notification day
is:
(a)
the last day of the remedial period; or
(b)
such later day as ASIC approves in writing (whether before or after the remedial period ends).
History
S 331AAA(2D) inserted by No 103 of 2004, s 3, Sch 1, Pt 3
[
100] (effective 1 July 2004).
331AAA(3)
[
Compliance]
A director of the responsible entity of a registered scheme must take all reasonable steps to secure compliance with subsection (1).
History
S 331AAA(3) inserted by No 103 of 2004, s 3, Sch 1, Pt 3
[
100] (effective 1 July 2004).
331AAA(4)
[
Cessation
-
members of audit firm]
If an audit firm ceases to be the auditor of a registered scheme under subsection (2) at a particular time, each member of the firm who:
(a)
is taken to have been appointed as an auditor of the scheme under subsection
324AB(1)
or
324AC(4)
; and
(b)
is an auditor of the scheme immediately before that time;
ceases to be an auditor of the scheme at that time.
History
S 331AAA(4) inserted by No 103 of 2004, s 3, Sch 1, Pt 3
[
100] (effective 1 July 2004).
SECTION 331AAB
REGISTERED SCHEME AUDITOR (APPOINTMENT TO FILL VACANCY)
331AAB(1)
[
Time limit]
If:
(a)
a vacancy occurs in the office of auditor of a registered scheme; and
(b)
there is no surviving or continuing auditor of the scheme;
the responsible entity must, within 1 month after the vacancy occurs, appoint an auditor to fill the vacancy.
331AAB(2)
[
Compliance]
A director of the responsible entity of a registered scheme must take all reasonable steps to secure compliance with subsection (1).
History
S 331AAB inserted by No 103 of 2004, s 3, Sch 1, Pt 3
[
100] (effective 1 July 2004).
SECTION 331AAC
ASIC'S POWER TO APPOINT REGISTERED SCHEME AUDITOR
331AAC(1)
[
Scope of power]
ASIC may appoint an auditor of a registered scheme if:
(a)
the responsible entity of the scheme does not appoint an auditor when required by this Act to do so; and
(b)
a member of the scheme applies to ASIC in writing for the appointment of an auditor under this section.
331AAC(2)
[
Consent of appointee]
ASIC may only appoint an individual, firm or company as auditor under subsection (1) if the individual, firm or company consents to being appointed.
History
S 331AAC inserted by No 103 of 2004, s 3, Sch 1, Pt 3
[
100] (effective 1 July 2004).
SECTION 331AAD
331AAD
REMAINING AUDITORS MAY ACT DURING VACANCY
While a vacancy in the office of auditor of a registered scheme continues, the surviving or continuing auditor or auditors (if any) may act as auditors of the company.
[
CCH Note:
The reference to ``company'' is a legislative error. The reference should read ``registered scheme''.]
History
S 331AAD inserted by No 103 of 2004, s 3, Sch 1, Pt 3
[
100] (effective 1 July 2004).
Subdivision B
-
Removal and resignation of registered scheme auditors
History
Subdiv B heading inserted by No 103 of 2004, s 3, Sch 1, Pt 3
[
100] (effective 1 July 2004).
SECTION 331AC
REMOVAL AND RESIGNATION OF AUDITORS
331AC(1)
The responsible entity of a registered scheme may, with ASIC
'
s consent, remove the auditor of the scheme from office.
331AC(2)
An auditor of a registered scheme may, by notice in writing given to the responsible entity, resign as auditor of the scheme if:
(a)
the auditor:
(i)
has, by notice in writing given to ASIC, applied for consent to the resignation and stated the reasons for the application; and
(ii)
has, at or about the same time as giving the notice to ASIC, given the responsible entity notice in writing of the application to ASIC; and
(b)
ASIC has given its consent.
331AC(3)
As soon as practicable after ASIC receives a notice from an auditor under subsection
(2)
, ASIC must notify the auditor, and the responsible entity of the registered scheme, whether it consents to the resignation.
331AC(4)
A statement made by an auditor in an application to ASIC under subsection
(2)
or in answer to an inquiry by ASIC relating to the reasons for the application:
(a)
is not admissible in evidence in any civil or criminal proceedings against the auditor; and
(b)
must not be made the ground of a prosecution, action or suit against the auditor.
A certificate by the ASIC that the statement was made in the application or in answer to the inquiry by ASIC is conclusive evidence that the statement was so made.
331AC(5)
The resignation of an auditor takes effect:
(a)
on the day (if any) specified for the purpose in the notice of resignation; or
(b)
on the day on which ASIC gives its consent to the resignation; or
(c)
on the day (if any) fixed by ASIC for the purpose;
whichever occurs last.
331AC(6)
If, on the retirement or withdrawal of a member of a firm, the firm will no longer be capable of acting as auditor of a registered scheme because of subparagraph
324BB(1)(b)(i)
or
(2)(b)(i)
, the member is (if not disqualified from acting as auditor of the scheme) taken to be the auditor of the scheme until he or she obtains the consent of ASIC to his or her retirement or withdrawal.
History
S 331AC(6) amended by No 103 of 2004, s 3, Sch 1, Pt 3
[
101].
331AC(7)
Within 14 days after:
(a)
the removal from office of an auditor of a registered scheme; or
(b)
the receipt of a notice of resignation from an auditor of a registered scheme;
the responsible entity must lodge with ASIC a notice of the removal or resignation in the prescribed form.
[
CCH Note:
S 331AC(7) will be amended by No 69 of 2020, s 3, Sch 1[630], by substituting
"
the Registrar a notice of the removal or resignation. The notice must meet any requirements of the data standards
"
for
"
ASIC a notice of the removal or resignation in the prescribed form
"
, (effective 1 July 2026 or a day or days to be fixed by Proclamation).]
SECTION 331AD
331AD
EFFECT OF WINDING UP ON OFFICE OF AUDITOR
An auditor of a registered scheme ceases to hold office if:
(a)
the scheme's constitution provides that the scheme is to be wound up at a specified time,in specified circumstances or on the happening of a specified event, and that time is reached, those circumstances occur or that event occurs; or
(b)
the members pass a resolution directing the responsible entity to wind up the scheme; or
(c)
the Court makes an order directing the responsible entity to wind up the scheme; or
(d)
the members pass a resolution to remove the responsible entity but do not, at the same meeting, pass a resolution choosing a company to be the new responsible entity that consents to becoming the scheme's responsible entity.
Subdivision C
-
Fees and expenses of auditors
History
Subdiv C heading inserted by No 103 of 2004, s 3, Sch 1, Pt 3
[
102] (effective 1 July 2004).
SECTION 331AE
331AE
FEES AND EXPENSES OF AUDITORS
The reasonable fees and expenses of an auditor of a registered scheme are payable by the responsible entity.
Division 8
-
Appointment, removal and fees of auditors of registrable superannuation entities
History
Div 8 inserted by No 29 of 2023, s 3, Sch 6[160] (effective 1 July 2023).
Subdivision A
-
Appointment of registrable superannuation entity auditors
History
Subdiv A inserted by No 29 of 2023, s 3, Sch 6[160] (effective 1 July 2023).
SECTION 331AF
REGISTRABLE SUPERANNUATION ENTITY AUDITOR (INITIAL APPOINTMENT OF AUDITOR)
331AF(1)
If a registrable superannuation entity is registered under section
29M
of the
Superannuation Industry (Supervision) Act 1993
after the commencement of this section, the RSE licensee must appoint an auditor of the entity for the purposes of this Chapter within 1 month after the day on which the entity is registered under that section.
331AF(2)
If:
(a)
a registrable superannuation entity was registered under section
29M
of the
Superannuation Industry (Supervision) Act 1993
immediately before the commencement of this section; and
(b)
immediately before the commencement of this section, an individual held an appointment as an auditor of the entity for the purposes of the RSE licensee law;
then:
(c)
the RSE licensee is taken to have appointed the individual as an auditor of the entity for the purposes of this Chapter; and
(d)
that appointment takes effect at the commencement of this section.
331AF(3)
A director of the registrable superannuation entity must take all reasonable steps to secure compliance with subsection
(1)
.
History
S 331AF inserted by No 29 of 2023, s 3, Sch 6[160] (effective 1 July 2023).
SECTION 331AG
REGISTRABLE SUPERANNUATION ENTITY AUDITOR (APPOINTMENT TO FILL VACANCY)
331AG(1)
If a vacancy occurs in the office of auditor of a registrable superannuation entity, the RSE licensee for the entity must, within 1 month after the vacancy occurs, appoint an auditor to fill the vacancy.
331AG(2)
A director of the registrable superannuation entity must take all reasonable steps to secure compliance with subsection
(1)
.
History
S 331AG inserted by No 29 of 2023, s 3, Sch 6[160] (effective 1 July 2023).
SECTION 331AH
REGISTRABLE SUPERANNUATION ENTITY AUDITOR (DURATION OF APPOINTMENT)
331AH(1)
An auditor of a registrable superannuation entity holds office until the auditor:
(a)
dies; or
(b)
is removed, or resigns, from office in accordance with section
331AK
; or
(c)
ceases to be capable of acting as an auditor because of Division
2
,
2A
or
5
of this Part; or
(d)
ceases to be auditor under subsection
(2)
,
(3)
,
(4)
or
(5)
.
331AH(2)
An auditor ceases to be the auditor of a registrable superannuation entity for the purposes of this Chapter if the auditor ceases to be the auditor of the entity for the purposes of the RSE licensee law.
331AH(3)
An individual auditor ceases to be the auditor of a registrable superannuation entity for the purposes of this Chapter if:
(a)
on a particular day (the
start day
), the individual auditor:
(i)
informs ASIC of a conflict of interest situation in relation to the entity under subsection
324CA(1A)
; or
(ii)
informs ASIC of particular circumstances in relation to the entity under subsection
324CE(1A)
; and
(b)
the individual auditor does not give ASIC a notice, before the notification day (see subsection
(6)
), that that conflict of interest situation has, or those circumstances have, ceased to exist before the end of the period (the
remedial period
) of 21 days, or such longer period as ASIC approves in writing, from the start day.
331AH(4)
An audit firm ceases to be auditor of a registrable superannuation entity under this subsection if:
(a)
on a particular day (the
start day
), ASIC is:
(i)
informed of a conflict of interest situation in relation to the entity under subsection
324CB(1A)
; or
(ii)
informed of particular circumstances in relation to the entity under subsection
324CF(1A)
; and
(b)
ASIC has not been given a notice on behalf of the audit firm, before the notification day (see subsection
(6)
), that that conflict of interest situation has, or those circumstances have, ceased to exist before the end of the period (the
remedial period
) of 21 days, or such longer period as ASIC approves in writing, from the start day.
331AH(5)
An audit company ceases to be auditor of a registrable superannuation entity under this subsection if:
(a)
on a particular day (the
start day
), ASIC is:
(i)
informed of a conflict of interest situation in relation to the entity under subsection
324CB(1A)
or
324CC(1A)
; or
(ii)
informed of particular circumstances in relation to the entity under subsection
324CF(1A)
or
324CG(1A)
or
(5A)
; and
(b)
ASIC has not been given a notice on behalf of the audit company, before the notification day (see subsection
(6)
), that that conflict of interest situation has, or those circumstances have, ceased to exist before the end of the period (the
remedial period
) of 21 days, or such longer period as ASIC approves in writing, from the start day.
331AH(6)
The
notification day
is:
(a)
the last day of the remedial period; or
(b)
such later day as ASIC approves in writing (whether before or after the remedial period ends).
331AH(7)
If an audit firm ceases to be the auditor of a registrable superannuation entity under subsection
(1)
at a particular time, each member of the firm who:
(a)
is taken to have been appointed as an auditor of the entity under subsection
324AB(1)
or
324AC(4)
; and
(b)
is an auditor of the entity immediately before that time;
ceases to be an auditor of the entity at that time.
History
S 331AH inserted by No 29 of 2023, s 3, Sch 6[160] (effective 1 July 2023).
SECTION 331AJ
ASIC
'
S POWER TO APPOINT AUDITOR OF A REGISTRABLE SUPERANNUATION ENTITY
331AJ(1)
ASIC may appoint an auditor of a registrable superannuation entity for the purposes of this Chapter if:
(a)
the RSE licensee for the entity does not appoint an auditor when required by this Act to do so; and
(b)
a member of the entity applies to ASIC in writing for the appointment of an auditor under this section.
331AJ(2)
ASIC may only appoint an individual, firm or company as auditor under subsection
(1)
if the individual, firm or company consents to being appointed.
331AJ(3)
If ASIC appoints an individual, firm or company as auditor under subsection
(1)
, ASIC must:
(a)
notify APRA of the appointment; and
(b)
do so as soon as practicable after making the appointment.
History
S 331AJ inserted by No 29 of 2023, s 3, Sch 6[160] (effective 1 July 2023).
Subdivision B
-
Removal and resignation of registrable superannuation entity auditors
History
Subdiv B inserted by No 29 of 2023, s 3, Sch 6[160] (effective 1 July 2023).
SECTION 331AK
REMOVAL AND RESIGNATION OF AUDITORS
331AK(1)
The RSE licensee for a registrable superannuation entity may, with ASIC
'
s consent, remove the auditor of the entity from office.
331AK(2)
An auditor of a registrable superannuation entity may, by notice in writing given to the RSE licensee for the entity, resign as auditor of the entity if:
(a)
the auditor:
(i)
has, by notice in writing given to ASIC, applied for consent to the resignation and stated the reasons for the application; and
(ii)
has, at or about the same time as giving the notice to ASIC, given the registrable superannuation entity notice in writing of the application to ASIC; and
(b)
ASIC has given its consent.
331AK(3)
As soon as practicable after ASIC receives a notice from an auditor under subsection
(2)
, ASIC must notify the auditor, and the registrable superannuation entity, whether it consents to the resignation.
331AK(4)
A statement made by an auditor in an application to ASIC under subsection
(2)
or in answer to an inquiry by ASIC relating to the reasons for the application:
(a)
is not admissible in evidence in any civil or criminal proceedings against the auditor; and
(b)
must not be made the ground of a prosecution, action or suit against the auditor.
A certificate by ASIC that the statement was made in the application or in answer to the inquiry by ASIC is prima facie evidence that the statement was so made.
331AK(5)
The resignation of an auditor takes effect:
(a)
on the day (if any) specified for the purpose in the notice of resignation; or
(b)
on the day on which ASIC gives its consent to the resignation; or
(c)
on the day (if any) fixed by ASIC for the purpose;
whichever occurs last.
331AK(6)
If, on the retirement or withdrawal of a member of a firm, the firm will no longer be capable of acting as auditor of a registrable superannuation entity because of subparagraph
324BB(1)(b)(i)
or
(2)(b)(i)
, the member is (if not disqualified from acting as auditor of the entity) taken to be the auditor of the entity until the member obtains the consent of ASIC to the member
'
s retirement or withdrawal.
331AK(7)
Within 14 days after:
(a)
the removal from office of an auditor of a registrable superannuation entity; or
(b)
the receipt of a notice of resignation from an auditor of a registrable superannuation entity;
the entity must lodge with ASIC a notice of the removal or resignation in the prescribed form.
331AK(8)
If ASIC consents to the removal or the resignation of an auditor of a registrable superannuation entity, ASIC must:
(a)
notify APRA of the consent; and
(b)
do so as soon as practicable after giving the consent.
History
S 331AK inserted by No 29 of 2023, s 3, Sch 6[160] (effective 1 July 2023).
Subdivision C
-
Fees and expenses of auditors
History
Subdiv C inserted by No 29 of 2023, s 3, Sch 6[160] (effective 1 July 2023).
SECTION 331AL
331AL
FEES AND EXPENSES OF AUDITORS
The reasonable fees and expenses of an auditor of a registrable superannuation entity are payable by the RSE licensee for the entity.
History
S 331AL inserted by No 29 of 2023, s 3, Sch 6[160] (effective 1 July 2023).