EXPLANATORY STATEMENT
Select Legislative Instrument 2011 No. 142
Issued by the authority of the Parliamentary Secretary to the Treasurer
Subject - Corporations Act 2001
Corporations Amendment Regulations 2011 (No. 3)
Subsection 1364(1) of the Corporations Act 2001 (the Act) provides that the Governor-General may make regulations prescribing matters required or permitted by the Act to be prescribed by regulations, or necessary or convenient to be prescribed by such regulations for carrying out or giving effect to the Act.
Section 1280 of the Act describes the requirements for registration as an auditor with the Australian Securities and Investments Commission. Paragraph 1280(2A)(c) of the Act requires the satisfactory completion of a course in auditing prescribed by the regulations for this purpose.
Regulation 9.2.03 of the Corporations Regulations 2001 (the Principal Regulations) lists the courses prescribed under paragraph 1280(2A)(c). The Institute of Chartered Accountants in Australia (ICAA) and CPA Australia have advised changes to the names of the courses they conduct under this regulation.
The Regulations amend the Principal Regulations to reflect these name changes. Specifically, the Regulations add to the prescribed list ‘Audit and Assurance in the CA Program’ conducted by the ICAA and ‘Advanced Audit and Assurance’ in the CPA Program.
The ICAA and CPA Australia have been consulted on, and approve, the Regulations.
Under the Corporations Agreement 2002 (the Corporations Agreement), the State and Territory Governments referred their constitutional powers with respect to corporate regulation to the Commonwealth. Under subclauses 507(2) and 511(3) of the Corporations Agreement, the Commonwealth is required to consult with State and Territory Ministers of the Ministerial Council for Corporations (the Council) before making a regulation under the national law. The Council has approved the amendments and agreed to waive the period of public consultation, given the machinery nature of the amendments.
The Act specifies no other conditions that need to be satisfied before the power to make the Regulations may be exercised.
The Regulations are a legislative instrument for the purposes of the Legislative Instruments Act 2003.
The Regulations commenced on the day after they were registered on the Federal Register of Legislative Instruments.
Overview
The Corporations Amendment Regulations 2011 (No. 3), issued under the authority of the Parliamentary Secretary to the Treasurer, aim to update the Corporations Regulations 2001 to reflect changes in course names offered by the Institute of Chartered Accountants in Australia (ICAA) and CPA Australia. These amendments address a gap by ensuring that the regulatory framework continues to accurately reference the specific courses that fulfil the auditing qualification requirements for auditor registration under the Corporations Act 2001. The regulation-making power is derived from the Act, specifically Section 1364(1), which empowers the Governor-General to prescribe matters necessary for the implementation of the Act. The policy objective is to maintain the integrity and efficacy of the regulatory requirements for auditors by keeping the prescribed course list current and reflective of the actual course names offered by the professional bodies. This legislative instrument was subject to consultation with the State and Territory Governments under the Corporations Agreement 2002, which mandates consultation with the Ministerial Council for Corporations before regulation-making. The Regulations commenced on the day after they were registered on the Federal Register of Legislative Instruments.
Scope and Application
The Corporations Amendment Regulations 2011 (No. 3) are an instrument made under the Corporations Act 2001, which applies to the entire Commonwealth of Australia and regulates corporate activities, including the registration of auditors. These regulations specifically address the amendment of the Corporations Regulations 2001 to update the names of auditing courses prescribed for auditor registration. The changes reflect updates to the course names provided by the Institute of Chartered Accountants in Australia and CPA Australia, thereby ensuring that the regulatory framework remains current and accurate. The regulations do not introduce any new substantive requirements but are purely technical adjustments to the list of prescribed courses. As such, they apply to individuals and entities seeking to register as auditors under the Act. The regulations were made in accordance with the requirements of the Corporations Agreement 2002, which mandates consultation with State and Territory Ministers of the Ministerial Council for Corporations before making regulations under the national law. The Ministerial Council has approved the amendments, acknowledging their machinery nature and waiving the public consultation period.
Key Provisions
The key provisions of the Corporations Amendment Regulations 2011 (No. 3) revolve around the amendments to the Corporations Regulations 2001, specifically under section 1280 of the Corporations Act 2001, which details the requirements for registration as an auditor. Section 1364(1) of the Act empowers the Governor-General to make regulations necessary for the Act's operation, and this particular regulation updates the list of prescribed auditing courses (section 1280(2A)(c)) by adding 'Audit and Assurance in the CA Program' conducted by the Institute of Chartered Accountants in Australia (ICAA) and 'Advanced Audit and Assurance' in the CPA Program, offered by CPA Australia. This update follows the institutes’ changes in course names and is a direct response to paragraph 1280(2A)(c) of the Act.
These regulations impose specific obligations on the ICAA and CPA Australia, ensuring that their auditing courses meet the necessary standards for auditors' registration. The amendments are a result of consultations with these institutes, which have approved the changes. Additionally, the Commonwealth's obligation under the Corporations Agreement 2002 to consult with State and Territory Ministers of the Ministerial Council for Corporations has been fulfilled. The Council has approved these amendments and agreed to waive the public consultation period, recognising the machinery nature of these changes.
The Regulations themselves do not stipulate any direct offences or penalties for non-compliance with the specified auditing course requirements. However, any failure to comply with the registration requirements under the Corporations Act 2001 could result in legal consequences for individuals or entities. Such consequences could include the inability to register as an auditor or potential disciplinary actions by the Australian Securities and Investments Commission. The specific penalties for these breaches are outlined elsewhere in the Corporations Act 2001, and can include substantial fines and imprisonment, depending on the nature and severity of the breach.