Corporations Act 2001

CHAPTER 2M - FINANCIAL REPORTS, SUSTAINABILITY 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

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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(Repealed by No 103 of 2004, s 3, Sch 1, Pt 3 [ 95] (effective 1 July 2004).)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

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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.

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324AA(2)

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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 that is the auditor of the entity for the purposes of this Chapter.

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SECTION 324AB EFFECT OF APPOINTING FIRM AS AUDITOR - GENERAL

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324AB(1)

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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.

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324AB(2)

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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 .

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324AB(3)

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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.

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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.

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SECTION 324AC EFFECT OF APPOINTING FIRM AS AUDITOR - RECONSTITUTION OF FIRM

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Reconstitution of firm

324AC(1)
This section deals with the situation in which:

(a)

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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.

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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)

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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.

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Appointments of continuing members not affected

324AC(5)

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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.

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324AC(6)
Nothing in this section affects the operation of section 324BB .

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SECTION 324AD EFFECT OF APPOINTING COMPANY AS AUDITOR

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324AD(1)

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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.

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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.

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SECTION 324AE

324AE MEANING OF PROFESSIONAL MEMBER- AUDIT TEAM

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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)

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a person who recommends or decides what the lead auditor is to be paid in connection with the performance of the audit;

(e)

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a person who provides, or takes part in providing, quality control for the audit.

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SECTION 324AF MEANING OF LEAD AUDITOR AND REVIEW AUDITOR

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Lead auditor

324AF(1)

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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.

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Review auditor

324AF(2)

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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.

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Division 2 - Registration requirements

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SECTION 324BA

324BA REGISTRATION REQUIREMENTS FOR APPOINTMENT OF INDIVIDUAL AS AUDITOR

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Subject to section 324BD , an individual contravenes this section if:

(a)

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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.

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SECTION 324BB REGISTRATION REQUIREMENTS FOR APPOINTMENT OF FIRM AS AUDITOR

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Contraventions by members of firm

324BB(1)
A person (the defendant ) contravenes this subsection if:

(a)

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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.

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324BB(2)
A person (the defendant ) contravenes this subsection if:

(a)

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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.

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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)

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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.

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Business name or members names requirement

324BB(6)
The firm satisfies this subsection if:

(a)

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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).]

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[ 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.]

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SECTION 324BC REGISTRATION REQUIREMENTS FOR APPOINTMENT OF COMPANY AS AUDITOR

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Contravention by company

324BC(1)
A company contravenes this subsection if:

(a)

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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.

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Contraventions by directors of company

324BC(2)
A person (the defendant ) contravenes this subsection if:

(a)

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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.

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324BC(3)
A person (the defendant ) contravenes this subsection if:

(a)

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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.

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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 .

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SECTION 324BD EXCEPTION FROM REGISTRATION REQUIREMENT FOR PROPRIETARY COMPANY

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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.

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SECTION 324BE EXCEPTION FROM REGISTRATION REQUIREMENT - REVIEWING FINANCIAL REPORTS OF COMPANIES LIMITED BY GUARANTEE

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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.

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324BE(2) [ Application of provisions with necessary modifications]

The provisions of this Act apply, with the necessary modifications, in relation to the individual accordingly.

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Division 2A - Eligibility requirements for auditors of registrable superannuation entities

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SECTION 324BF ELIGIBILITY REQUIREMENTS FOR AUDITORS OF REGISTRABLE SUPERANNUATION ENTITIES

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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.

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Division 3 - Auditor independence

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Subdivision A - General requirement

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SECTION 324CA GENERAL REQUIREMENT FOR AUDITOR INDEPENDENCE - AUDITORS

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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 .

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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

(d) subsection 331AH(3) or (5) (registrable superannuation entity).

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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.

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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.

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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.

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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 .

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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.

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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 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 .

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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 .

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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 .

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SECTION 324CB GENERAL REQUIREMENT FOR AUDITOR INDEPENDENCE - MEMBER OF AUDIT FIRM

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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 .

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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 .

(a) subsection 327B(2B) (public company); or

(b) subsection 328E(4) (public company with crowd-sourced funding); or

(d) subsection 331AH(4) (registrable superannuation entity).

View history note

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.

View history note

324CB(1C)
However:

(a) the information; and

(b) the giving of the information;

View history note

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.

View history note

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 .

View history note

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.

View history note

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 .

View history note

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.

View history note

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 .

View history note

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 .

View history note

SECTION 324CC GENERAL REQUIREMENT FOR AUDITOR INDEPENDENCE - DIRECTOR OF AUDIT COMPANY

View history reference

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) .

View history note

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 .

(a) subsection 327B(2C) (public company); or

(b) subsection 328E(5) (public company with crowd-sourced funding); or

(d) subsection 331AH(5) (registrable superannuation entity).

View history note

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.

View history note

324CC(1C)
However, if the person is a natural person:

(a) the information; and

(b) the giving of the information;

View history note

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.

View history note

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) .

View history note

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.

View history note

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) .

View history note

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.

View history note

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 .

View history note

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 .

View history note

SECTION 324CD CONFLICT OF INTEREST SITUATION

View history reference

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)

View history reference

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 forthe 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 .

View history note

Subdivision B - Specific requirements

View history reference

Note: This Subdivision applies in relation to retail CCIVs in a modified form: see section 1232P .

View history note

SECTION 324CE AUDITOR INDEPENDENCE - SPECIFIC REQUIREMENTS FOR INDIVIDUAL AUDITOR

View history reference

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.

View history note

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 is the 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

(d) subsection 331AH(3) (registrable superannuation entity).

View history note

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.

View history note

324CE(1C)
However:

(a) the information; and

(b) the giving of the information;

View history note

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.

View history note

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.

View history note

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.

View history note

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 .

View history note

People and entities covered

324CE(5)

View history reference

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)

View history note

[ 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.

View history note

324CE(6A)

View history reference

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 ).

View history note

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 by the 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.

View history note

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.

View history note

SECTION 324CF AUDITOR INDEPENDENCE - SPECIFIC REQUIREMENTS FOR AUDIT FIRM

View history reference

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.

View history note

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.

(a) subsection 327B(2B) (public company); or

(b) subsection 328E(4) (public company with crowd-sourced funding); or

(d) subsection 331AH(4) (registrable superannuation entity).

View history note

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.

View history note

324CF(1C)
However:

(a) the information; and

(b) the giving of the information;

View history note

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.

View history note

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.

View history note

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.

View history note

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 .

View history note

People and entities covered

324CF(5)

View history reference

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)

View history note

[ 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:

(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.

View history note

324CF(6A)

View history reference

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 ).

View history note

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.

View history note

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.

View history note

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.

View history note

SECTION 324CG AUDITOR INDEPENDENCE - SPECIFIC REQUIREMENTS FOR AUDIT COMPANY

View history reference

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.

View history note

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.

(a) subsection 327B(2C) (public company); or

(b) subsection 328E(5) (public company with crowd-sourced funding); or

(d) subsection 331AH(3) (registrable superannuation entity).

View history note

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.

View history note

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.

View history note

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.

View history note

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 .

View history note

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.

View history note

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.

(a) subsection 327B(2C) (public company); or

(b) subsection 328E(5) (public company with crowd-sourced funding); or

(d) subsection 331AH(3) (registrable superannuation entity).

View history note

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.

View history note

324CG(5C)
However, if the person is a natural person:

(a) the information; and

(b) the giving of the information;

View history note

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.

View history note

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.

View history note

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.

View history note

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 .

View history note

People and entities covered

324CG(9)

View history reference

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)

View history note

[ 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:

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.

View history note

324CG(10A)

View history reference

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 ).

View history note

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.

View history note

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.

View history note

SECTION 324CH RELEVANT RELATIONSHIPS

View history reference

Table of relevant relationships.

324CH(1)

View history reference

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)

View history note

[ 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.

View history note

Applying table if audited body is registrable superannuation entity

324CH(2A)

View history reference

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.

View history note

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 .

View history note

Small proprietary companies.

324CH(3A)

View history reference

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.

View history note

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.

View history note

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)

View history reference

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.

View history note

Goods and services exception.

324CH(5A)

View history reference

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.

View history note

[ 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)

View history reference

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.

View history note

[ 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.

View history note

324CH(6A)

View history reference

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)

View history reference

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.

View history note

[ 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.

View history note

Future debts and liabilities.

324CH(8A)

View history reference

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.

View history note

[ 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)

View history reference

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.

View history note

SECTION 324CI

324CI SPECIAL RULE FOR RETIRING PARTNERS OF AUDIT FIRMS AND RETIRING DIRECTORS OF AUTHORISED AUDIT COMPANIES

View history reference

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

View history reference

(e) subsection 324CH(3A) (about small proprietary companies) does not apply to the audited body for the most recently ended financial year.

View history reference

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.

View history note

[ 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

View history reference

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

View history reference

(e) subsection 324CH(3A) (about small proprietary companies) does not apply to the audited body for the most recently ended financial year.

View history reference

View history note

[ 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

View history reference

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

View history reference

(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.

View history reference

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.

View history note

[ 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

View history reference

SECTION 324CL PEOPLE WHO ARE REGARDED AS OFFICERS OF A COMPANY FOR THE PURPOSES OF THIS DIVISION

View history reference

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 .

View history note

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 serviceof 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.

View history note

SECTION 324CLA EXTENDED MEANING OF OFFICER OF A REGISTRABLE SUPERANNUATION ENTITY

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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.

View history note

Division 4 - Deliberately disqualifying auditor

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View history note

SECTION 324CM DELIBERATELY DISQUALIFYING AUDITOR View history reference

Individual auditor

324CM(1)
An individual contravenes this subsection if:

(a)

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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)

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the individual cannot, while that state of affairs continues, act as auditor of the company, scheme or entity without contravening Division 2 or 3 .

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Audit firm

324CM(2)
A member of a firm contravenes this subsection if:

(a)

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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)

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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 .

View history note

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)

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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)

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the company cannot, while that state of affairs continues, act as auditor of the company, scheme or entity without contravening Division 2 or 3 .

View history note

Division 5 - Auditor rotation for listed companies, listed registered schemes and registrable superannuation entities

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View history note

SECTION 324DA LIMITED TERM FOR ELIGIBILITY TO PLAY SIGNIFICANT ROLE IN AUDIT OF A LISTED COMPANY, LISTED REGISTERED SCHEME OR REGISTRABLE SUPERANNUATION ENTITY

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324DA(1)

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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 .

View history note

324DA(2)

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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.

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324DA(3)

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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)

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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)

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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.

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SECTION 324DAA DIRECTORS MAY EXTEND ELIGIBILITY TERM

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324DAA(1)

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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) .

View history note

324DAA(2)
The approval must be granted before the end of those 5 successive financial years.

324DAA(3)

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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.

View history note

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)

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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.

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SECTION 324DAB REQUIREMENTS FOR DIRECTORS TO APPROVE EXTENSION OF ELIGIBILITY TERM

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Requirements if company, scheme or entity has audit committee

324DAB(1)

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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.

View history note

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)

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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)

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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.

View history note

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)

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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.

View history note

SECTION 324DAC

324DAC NOTIFICATIONS ABOUT APPROVAL TO EXTEND ELIGIBILITY TERM

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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)

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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. " before the note, (effective 1 July 2026 or a day or days to be fixed by Proclamation).]

View history note

SECTION 324DAD

324DAD APPROVAL INEFFECTIVE UNLESS IT COMPLIES WITH REQUIREMENTS

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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.

View history note

SECTION 324DB

324DB INDIVIDUAL ' S ROTATION OBLIGATION

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An individual contravenes this section if the individual:

(a)

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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.

View history note

SECTION 324DC AUDIT FIRM ' S ROTATION OBLIGATION

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Contraventions by members of audit firm

324DC(1)
A person (the defendant ) contravenes this subsection if:

(a)

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an audit firm consents to act as a listed company ' s auditor, listed registered scheme ' s auditor or registrable superannuation entity ' s auditor for a financial year; and

(b)

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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)

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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)

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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.

View history note

324DC(2)
A person (the defendant ) contravenes this subsection if:

(a) an audit firm consents to act as a listed company ' s auditor, listed registered scheme ' s auditor or registrable superannuation entity ' s auditor for a financial year; and

(b)

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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)

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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.

View history note

324DC(3)

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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.

View history note

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 .

View history note

SECTION 324DD AUDIT COMPANY ' S ROTATION OBLIGATION

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Contravention by audit company

324DD(1)
An audit company contravenes this subsection if:

(a)

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the audit company consents to act as a listed company ' s auditor, listed registered scheme ' s auditor or registrable superannuation entity ' s auditorfor a financial year; and

(b)

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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)

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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)

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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.

View history note

Contraventions by directors of audit company

324DD(2)
A person (the defendant ) contravenes this subsection if:

(a)

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an audit company consents to act as a listed company ' s auditor, listed registered scheme ' s auditor or registrable superannuation entity ' s auditor for a financial year; and

(b)

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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)

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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)

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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.

View history note

324DD(3)
A person (the defendant ) contravenes this subsection if:

(a)

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an audit company consents to act as a listed company ' s auditor, listed registered scheme ' s auditor or registrable superannuation entity ' s auditor for a financial year; and

(b)

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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)

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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.

View history note

324DD(4)

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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.

View history note

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 .

View history note

Division 6 - Appointment, removal and fees of auditors for companies

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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.

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Subdivision A - Appointment of company auditors

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View history note

SECTION 325 APPOINTMENT OF AUDITOR BY PROPRIETARY COMPANY

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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.

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325(2)

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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.

View history note

325(3)

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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).

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325(4)

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A director of a company must take all reasonable steps to comply with, or to secure compliance with, subsection (2).

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[ 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)

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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)

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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.

View history reference

View history note

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).

View history note

SECTION 327B PUBLIC COMPANY AUDITOR (ANNUAL APPOINTMENTS AT AGMs TO FILL VACANCIES)

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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.

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327B(1A)

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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.

View history note

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).

View history note

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.

View history reference

View history note

[ 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.

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View history note

[ 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.

View history reference

View history note

[ 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).

View history note

327B(3)
A director of a company must take all reasonable steps to comply with, or to secure compliance with, subsection (1).

View history note

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.

View history note

SECTION 327C PUBLIC COMPANY AUDITOR (APPOINTMENT TO FILL CASUAL VACANCY)

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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) .

View history note

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).

View history note

SECTION 327D APPOINTMENT TO REPLACE AUDITOR REMOVED FROM OFFICE

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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.

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SECTION 327E ASIC MAY APPOINT A COMPANY AUDITOR IF AUDITOR REMOVED BUT NOT REPLACED

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327E(1)

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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 .

View history note

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)

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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.

View history note

SECTION 327F ASIC ' S GENERAL POWER TO APPOINT A COMPANY AUDITOR

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327F(1)

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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

View history reference

(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 .

View history note

327F(2)

View history reference

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.

View history note

SECTION 327G RESTRICTIONS ON ASIC ' S POWERS TO APPOINT A COMPANY AUDITOR

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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.

View history note

SECTION 327H

327H EFFECT ON APPOINTMENT OF PUBLIC COMPANY AUDITOR OF COMPANY BEGINNING TO BE CONTROLLED BY A CORPORATION

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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) .

View history note

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

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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.

View history note

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

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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.

View history note

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 .

View history note

SECTION 328B NOMINATION OF AUDITOR

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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 .

View history note

[ 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.

View history note

SECTION 328C PUBLIC COMPANY AUDITOR (APPOINTMENT OF AUDITOR WHEN CROWD-SOURCED FUNDING CONCESSION ENDS)

View history reference

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).

View history note

SECTION 328D PUBLIC COMPANY AUDITOR (APPOINTMENT OF AUDITOR WHEN $3 MILLION RAISED USING CROWD-SOURCED FUNDING)

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328D(1)

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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.

View history note

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).

View history note

SECTION 328E CROWD-SOURCED FUNDING - PERIOD OF OFFICE

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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.

View history note

Subdivision B - Removal and resignation of company auditors

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View history note

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)

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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.

View history note

329(10)

View history reference

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.

View history note

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

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View history note

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 auditors for registered schemes

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Note: Section 1232R applies a modified version of this Division in relation to a retail CCIV.

View history note

Subdivision A - Appointment of registered scheme auditors

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View history note

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)

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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.

View history note

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).

View history note

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

View history reference

View history note

[ 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

View history reference

View history note

[ 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

View history reference

View history note

[ 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).

View history note

331AAA(3) [ Compliance]

A director of the responsible entity of a registered scheme must take all reasonable steps to secure compliance with subsection (1).

View history note

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.

View history note

SECTION 331AAB REGISTERED SCHEME AUDITOR (APPOINTMENT TO FILL VACANCY)

View history reference

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).

View history note

SECTION 331AAC ASIC'S POWER TO APPOINT REGISTERED SCHEME AUDITOR

View history reference

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.

View history note

SECTION 331AAD

331AAD REMAINING AUDITORS MAY ACT DURING VACANCY

View history reference

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''.]

View history note

Subdivision B - Removal and resignation of registered scheme auditors

View history reference

View history note

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)

View history reference

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.

View history note

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

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View history note

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

View history reference

View history note

Subdivision A - Appointment of registrable superannuation entity auditors

View history reference

View history note

SECTION 331AF REGISTRABLE SUPERANNUATION ENTITY AUDITOR (INITIAL APPOINTMENT OF AUDITOR)

View history reference

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) .

View history note

SECTION 331AG REGISTRABLE SUPERANNUATION ENTITY AUDITOR (APPOINTMENT TO FILL VACANCY)

View history reference

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) .

View history note

SECTION 331AH REGISTRABLE SUPERANNUATION ENTITY AUDITOR (DURATION OF APPOINTMENT)

View history reference

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.

View history note

SECTION 331AJ ASIC ' S POWER TO APPOINT AUDITOR OF A REGISTRABLE SUPERANNUATION ENTITY

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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.

View history note

Subdivision B - Removal and resignation of registrable superannuation entity auditors

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View history note

SECTION 331AK REMOVAL AND RESIGNATION OF AUDITORS

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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.

View history note

Subdivision C - Fees and expenses of auditors

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View history note

SECTION 331AL

331AL FEES AND EXPENSES OF AUDITORS

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The reasonable fees and expenses of an auditor of a registrable superannuation entity are payable by the RSE licensee for the entity.

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