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

91   After subsection 300(11)

Insert:

(11A) If a registered company auditor plays a significant role in the audit of a listed company for the financial year in reliance on a declaration made under section 342A, the report for the company must also include details of the declaration.

Listed companies - non-audit services and auditor independence

(11B) The report for a listed company must also include the following in relation to each auditor:

(a) details of the amounts paid or payable to the auditor for non-audit services provided, during the year, by the auditor (or by another person or firm on the auditor's behalf);

(b) a statement whether the directors are satisfied that the provision of non-audit services, during the year, by the auditor (or by another person or firm on the auditor's behalf) is compatible with the general standard of independence for auditors imposed by this Act;

(c) a statement of the directors' reasons for being satisfied that the provision of those non-audit services, during the year, by the auditor (or by another person or firm on the auditor's behalf) did not compromise the auditor independence requirements of this Act.

These details and statements must be included in the directors' report under the heading "Non-audit services". If consolidated financial statements are required, the details and statements must relate to amounts paid or payable to the auditor by, and non-audit services provided to, any entity (including the company, registered scheme or disclosing entity) that is part of the consolidated entity.

(11C) For the purposes of paragraph (11B)(a), the details of amounts paid or payable to an auditor for non-audit services provided, during the year, by the auditor (or by another person or firm on the auditor's behalf) are:

(a) the name of the auditor; and

(b) the dollar amount that:

(i) the listed company; or

(ii) if consolidated financial statements are required - any entity that is part of the consolidated entity;

paid, or is liable to pay, for each of those non-audit services.

(11D) The statements under paragraphs (11B)(b) and (c) must be made in accordance with:

(a) advice provided by the listed company's audit committee if the company has an audit committee; or

(b) a resolution of the directors of the listed company if paragraph (a) does not apply.

(11E) For the purposes of subsection (11D), a statement is taken to be made in accordance with advice provided by the company's audit committee only if:

(a) the statement is consistent with that advice and does not contain any material omission of material included in that advice; and

(b) the advice is endorsed by a resolution passed by the members of the audit committee; and

(c) the advice is written advice signed by a member of the audit committee on behalf of the audit committee and given to the directors.