Corporations Act. Australia
controls or has controlled;
(b) having been appointed, for any purpose relating to taxation, as public officer of:
(i) a body corporate; or
(ii) an unincorporated body; or
(iii) a trust estate;
(c) being or having been authorised to accept service of process or notices on behalf of:
(i) the company; or
(ii) a related body corporate; or
(iii) an entity that the company controls or has controlled.
Division 4 — Deliberately disqualifying auditor
324CM Deliberately disqualifying auditor
Individual auditor
(1) An individual contravenes this subsection if:
(a) the individual is appointed auditor of a company or registered scheme; and
(b) while the appointment continues, the individual brings about a state of affairs; and
(c) the individual cannot, while that state of affairs continues, act as auditor of the company or scheme without contravening Division 2 or 3.
Audit firm
(2) A member of a firm contravenes this subsection if:
(a) the firm is appointed auditor of a company or a registered scheme; and
(b) while the appointment continues, the member brings about a state of affairs; and
(c) the firm cannot, while that state of affairs continues, act as auditor of the company or scheme without a person contravening Division 2 or 3.
Audit company
(3) A person who is:
(a) a member of a company; or
(b) a director of a company; or
(c) a lead auditor in relation to an audit conducted by a company;
contravenes this subsection if:
(d) the company is appointed auditor of a company or a registered scheme; and
(e) while the appointment continues, the person brings about a state of affairs; and
(f) the company cannot, while that state of affairs continues, act as auditor of the company or scheme without contravening Division 2 or 3.
Division 5 — Auditor rotation for listed companies
324DA Limited term for eligibility to play significant role in audit of a listed company or listed registered scheme
(1) If an individual plays a significant role in the audit of a listed company or listed registered scheme 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 or the scheme 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 or the scheme 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.
(2) An individual is not eligible to play a significant role in the audit of a listed company or listed registered scheme for a financial year if, were the individual to do so, the individual would play a significant role in the audit of the company or scheme for more than 5 out of 7 successive financial years.
(3) For the purposes of subsection (2), disregard an individual’s playing of a significant role in the audit of a company or scheme for a financial year if:
(a) either:
(i) the directors of the company or scheme grant an approval under section 324DAA in relation to the individual; or
(ii) ASIC makes a declaration under paragraph 342A(1)(a) in relation to the individual; and
(b) because of the approval or the declaration, subsection (1) of this section does not operate to make the individual not eligible to play a significant role in the audit of the company or scheme for that financial year.
324DAA Directors may extend eligibility term
(1) Subject to section 324DAB, the directors of a listed company, or of a listed registered scheme, may, by resolution, grant an approval for an individual to play a significant role in the audit of the company or scheme for not more than 2 successive financial years in addition to the 5 successive financial years mentioned in subsection 324DA(1).
(2) The approval must be granted before the end of those 5 successive financial years.
(3) If the directors grant the approval, subsection 324DA(1) applies to the individual, in relation to the audit of the company or scheme, 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.
(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.
(5) If the directors grant the approval for the additional successive year, subsection 324DA(1) applies to the individual, in relation to the audit of the company or scheme, as if the references in that subsection to 5 successive financial years were references to 7 successive financial years.
324DAB Requirements for directors to approve extension of eligibility term
Requirements if company or scheme has audit committee
(1) If a listed company, or the responsible entity of a listed registered scheme, 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.
(2) An approval is taken to be made in accordance with a recommendation provided by the audit committee only if:
(a) the approval is consistent with the audit committee’s recommendation; and
(b) the recommendation is endorsed by a resolution passed by the members of the audit committee; and
(c) the recommendation is in writing signed by a member of the audit committee on behalf of the audit committee and given to the directors of the company or scheme; and
(d) the recommendation states that the audit committee is satisfied that the approval:
(i) is consistent with maintaining the quality of the audit provided to the company or scheme; 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.
Requirements if company or scheme does not have