Corporations Act. Australia
(e) the defendant is not the individual and is or becomes aware that the individual is not eligible to play that role; and
(f) 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 or scheme; 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 or scheme for that financial year.
(3) A person (the defendant) contravenes this subsection if:
(a) an audit company consents to act as a listed company’s or listed registered scheme’s auditor for a financial year; and
(b) an individual acts, on behalf of the audit company, as a lead or review auditor in relation to the audit of the company’s or scheme’s financial report for that financial year; and
(c) the individual is not eligible to play a significant role in the audit of the company or scheme 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.
(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) 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.
(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.
Division 6 — Appointment, removal and fees of auditors for companies
Subdivision A — Appointment of company auditors
325 Appointment of auditor by proprietary company
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.
327A Public company auditor (initial appointment of auditor)
(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.
(2) Subject to this Part, an auditor appointed under subsection (1) holds office until the company’s first AGM.
(3) A director of a company must take all reasonable steps to comply with, or to secure compliance with, subsection (1).
327B Public company auditor (annual appointments at AGMs to fill vacancies)
(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.
(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).
(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.
(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.
(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.
(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 a company must take all reasonable steps to comply with, or to secure compliance with, subsection (1).
(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.
327C Public company auditor (appointment to fill casual vacancy)
(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