THE CORPORATIONS LAW

CHAPTER 2M - FINANCIAL REPORTS AND AUDIT

PART 2M.6 - EXEMPTIONS AND MODIFICATIONS

SECTION 342   CRITERIA FOR SPECIFIC EXEMPTION ORDERS AND CLASS ORDERS  

342(1)  [ASIC must be satisfied]  

To make an order under section 340 or 341, ASIC must be satisfied that complying with the relevant requirements of Parts 2M.2, 2M.3 and 2M.4 would:

(a)  make the financial report or other reports misleading; or

(b)  be inappropriate in the circumstances; or

(c)  impose unreasonable burdens.

342(2)  [Unreasonable burden]  

In deciding for the purposes of subsection (1) whether the audit requirements for a proprietary company, or a class of proprietary companies, would impose an unreasonable burden on the company or companies, ASIC is to have regard to:

(a)  the expected costs of complying with the audit requirements; and

(b)  the expected benefits of having the company or companies comply with the audit requirements; and

(c)  any practical difficulties that the company or companies face in complying effectively with the audit requirements (in particular, any difficulties that arise because a financial year is the first one for which the audit requirements apply or because the company or companies are likely to move frequently between the small and large proprietary company categories from one financial year to another); and

(d)  any unusual aspects of the operation of the company or companies during the financial year concerned; and

(e)  any other matters that ASIC considers relevant.

342(3)  [Assessing expected benefits]  

In assessing expected benefits under subsection (2), ASIC is to take account of:

(a)  the number of creditors and potential creditors; and

(b)  the position of creditors and potential creditors (in particular, their ability to independently obtain financial information about the company or companies); and

(c)  the nature and extent of the liabilities of the company or companies.