Australian Securities and Investments Commission Class Order [Co 05/910] (Cth)

Australian Securities and Investments Commission
Corporations Act 2001 — Subsection 341(1) — Order

Enabling legislation

1. The Australian Securities and Investments Commission makes this order under subsection 341(1) of the Corporations Act 2001 (the Act).

Title

2.         This order is ASIC Class Order [CO 05/910].

Commencement

3.         This order commences on the date it is registered under the Legislative Instruments Act 2003.

Note:      An instrument is registered when it is recorded on the Federal Register of Legislative Instruments (FRLI) in electronic form: see Legislative Instruments Act 2003, s 4 (definition of register). The FRLI may be accessed at – Auditor’s independence declaration

Relief for auditors

4. An individual auditor does not have to give an auditor’s declaration under subsection 307C(1) of the Act to the directors of a company, registered scheme or disclosing entity in relation to an audit for a financial year (the reporting period) or an audit or review for a half year (the reporting period) where:

(a) that declaration must set out details of a contravention of subsection 324CE(2) of the Act; and

(b) the individual auditor has reasonable grounds to believe that they had in place at the time of the contravention a quality control system that provided reasonable assurance (taking into account the size and nature of the audit practice of the individual auditor) that the individual auditor and the individual auditor’s employees complied with the requirements of Subdivision B of Division 3 of Part 2M.4 of the Act.

5. A lead auditor does not have to give an auditor’s declaration under subsection 307C(3) of the Act to the directors of a company, registered scheme or disclosing entity in relation to an audit or review for a reporting period where:

(a) the declaration must set out details of a contravention of subsection 324CF(2) or 324CG(2) of the Act; and

(b) the lead auditor has reasonable grounds to believe that the firm or company had in place at the time of the contravention a quality control system that provided reasonable assurance (taking into account the size and nature of the audit practice of the audit firm or company) that the audit firm or company and its employees complied with the requirements of Subdivision B of Division 3 of Part 2M.4 of the Act.

Condition of relief for auditors

6.         An individual auditor or a lead auditor who relies on the relief in paragraph 4 or 5 must give the directors of the company, registered scheme or disclosing entity:

(a)        a written statement that, to the best of the auditor’s knowledge and belief, there have been:

(i) no contraventions of the auditor independence requirements of the Act in relation to the audit or review for the reporting period other than a contravention covered by this order; and

(ii)        no contraventions of any applicable code of professional conduct in relation to the audit or review for the reporting period; or

(b)        a written statement that, to the best of the auditor’s knowledge and belief, the only contraventions of:

(i) the auditor independence requirements of the Act in relation to the audit or review for the reporting period other than a contravention covered by this order; or

(ii)        any applicable code of professional conduct in relation to the audit or review for the reporting period;

are those contraventions the details of which are set out in the statement.

The relief may be relied on only if this condition is met.

7.         The statement under paragraph 6 must be:

(a)        given either:

(i)         when the audit report for the audit or review for the reporting period is given to the directors of the company, registered scheme or disclosing entity; or

(ii) where paragraph 8 applies—before the directors of the company, registered scheme or disclosing entity pass the resolution required under subsection 298(2) or 306(3) of the Act (as relevant) in relation to the directors’ report for the reporting period; and

(b)        must be signed by the person giving the statement.

8.         The statement under paragraph 6 may be given at the time referred to in subparagraph 7(a)(ii) where:

(a)        the directors’ report is signed within 7 days after the statement is given;

(b) the auditor’s report required under section 308 or 309 of the Act for the audit or review to which the statement relates is made within 7 days after the directors’ report is signed and either:

(i)         indicates that the statement would be in the same terms if it had been given to the relevant directors at the time the audit report was made; or

(ii)        indicates that circumstances have changed since the statement was given to the relevant directors and describes how the statement would differ if it had been given to the relevant directors at the time the audit report was made.

Relief for companies etc

9. A company, registered scheme or disclosing entity whose directors are not given an auditor’s declaration under section 307C of the Act in relation to the audit for a financial year because an individual auditor or lead auditor relied on the relief in paragraphs 4 or 5 does not have to comply with subsection 298(1) of the Act to the extent that it requires the directors’ report for the financial year to include a copy of the declaration.

10. Directors of a disclosing entity who are not given an auditor’s declaration under section 307C of the Act in relation to the audit or review for a half year because an individual auditor or lead auditor relied on the relief in paragraphs 4 or 5 do not have to comply with section 306 of the Act to the extent that it requires the directors’ report for the half year to include a copy of the declaration.

Condition of relief for companies etc

11.       A company, registered scheme or disclosing entity which relies, or the directors of a disclosing entity who rely, on the relief in paragraph 9 or 10 must include in the relevant directors’ report a copy of the relevant statement given under paragraph 6.  The relief may be relied on only if this condition is met.

Dated this 5th day of September 2005

Signed by Stephen Yen PSM

as a delegate of the Australian Securities and Investments Commission