Corporate Law Economic Reform Program (Audit Reform and Corporate Disclosure) Act 2004 (103 of 2004)

Schedule 1   Audit Reform

Part 3   Auditor appointment, independence and rotation requirements

Corporations Act 2001

100   Sections 331AA and 331AB

Repeal the sections, substitute:

331AAA Registered scheme auditor (initial appointment of auditor)

(1) 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.

(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 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).

(2A) An individual auditor ceases to be auditor of a registered scheme under this subsection if:

(a) on a particular day (the start day ), the individual auditor:

(i) informs ASIC of a conflict of interest situation in relation to the scheme under subsection 324CA(1A); or

(ii) informs ASIC of particular circumstances in relation to the scheme under subsection 324CE(1A); and

(b) the individual auditor does not give ASIC a notice, before the notification day (see subsection (2D)), that that conflict of interest situation has, or those circumstances have, ceased to exist before the end of the period (the remedial period ) of 21 days from the start day.

(2B) An audit firm ceases to be auditor of a registered scheme under this subsection if:

(a) on a particular day (the start day ), ASIC is:

(i) informed of a conflict of interest situation in relation to the scheme under subsection 324CB(1A); or

(ii) informed of particular circumstances in relation to the scheme under subsection 324CF(1A); and

(b) ASIC has not been given a notice on behalf of the audit firm, before the notification day (see subsection (2D)), that that conflict of interest situation has, or those circumstances have, ceased to exist before the end of the period (the remedial period ) of 21 days from the start day.

(2C) An audit company ceases to be auditor of a registered scheme under this subsection if:

(a) on a particular day (the start day ), ASIC is:

(i) informed of a conflict of interest situation in relation to the scheme under subsection 324CB(1A) or 324CC(1A); or

(ii) informed of particular circumstances in relation to the scheme under subsection 324CF(1A) or 324CG(1A) or (5A); and

(b) ASIC has not been given a notice on behalf of the audit company, before the notification day (see subsection (2D)), that that conflict of interest situation has, or those circumstances have, ceased to exist before the end of the period (the remedial period ) of 21 days from the start day.

(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).

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

(4) 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.

331AAB Registered scheme auditor (appointment to fill vacancy)

(1) 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.

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

331AAC ASIC's power to appoint registered scheme auditor

(1) 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.

(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.

331AAD Remaining auditors may act during vacancy

While a vacancy in the office of auditor of a registered scheme continues, the surviving or continuing auditor or auditors (if any) may act as auditors of the company.

Subdivision B - Removal and resignation of registered scheme auditors