Corporations Act. Australia

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      324CE Auditor independence — specific requirements for individual auditor

      Specific independence requirements for individual auditor

      (1) An individual auditor contravenes this subsection if:

      (a) the individual auditor engages in audit activity at a particular time; and

      (b) a relevant item of the table in subsection 324CH(1) applies at that time to a person or entity covered by subsection (5) of this section; and

      (c) the individual auditor is or becomes aware of the circumstances referred to in paragraph (b); and

      (d) the individual auditor does not, as soon as possible after the individual auditor becomes aware of those circumstances, take all reasonable steps to ensure that the individual auditor does not continue to engage in audit activity in those circumstances.

      Individual auditor to notify ASIC

      (1A) An individual auditor contravenes this subsection if:

      (a) the individual auditor is the auditor of an audited body; and

      (b) a relevant item of the table in subsection 324CH(1) applies to a person or entity covered by subsection (5) of this section while the individual auditor is the auditor of the audited body; and

      (c) on a particular day (the start day), the individual auditor becomes aware of the circumstances referred to in paragraph (b); and

      (d) at the end of the period of 7 days from the start day:

      (i) those circumstances remain in existence; and

      (ii) the individual auditor has not informed ASIC in writing of those circumstances.

      Note: If the audited body is a public company or a registered scheme and the notice under this subsection is not followed up by a notice under subsection 327B(2A) (public company) or 331AAA(2A) (registered scheme) within the period of 21 days (or a longer period that has been approved by ASIC) from the day the notice under this subsection is given, the audit appointment will be terminated at the end of that period.

      (1B) A person is not excused from informing ASIC under subsection (1A) that the circumstances referred to in paragraph (1A)(b) exist on the ground that the information might tend to incriminate the person or expose the person to a penalty.

      (1C) However:

      (a) the information; and

      (b) the giving of the information;

      are not admissible in evidence against the person in a criminal proceeding, or any other proceeding for the recovery of a penalty, other than proceedings for an offence based on the information given being false or misleading.

      (1D) If the individual auditor gives ASIC a notice under paragraph (1A)(d), ASIC must, as soon as practicable after the notice has been received, give a copy of the notice to the audited body.

      Strict liability contravention of specific independence requirements by individual auditor

      (2) An individual auditor contravenes this subsection if:

      (a) the individual auditor engages in audit activity at a particular time; and

      (b) a relevant item of the table in subsection 324CH(1) applies at that time to a person or entity covered by subsection (5) of this section.

      (3) For the purposes of an offence based on subsection (2), strict liability applies to the physical elements of the offence specified in paragraph (2)(b).

      Note 1: For strict liability, see section 6.1 of the Criminal Code.

      Note 2: Subsection (4) provides a defence.

      (4) An individual auditor does not commit an offence because of a contravention of subsection (2) in relation to audit activity engaged in by the individual auditor at a particular time if the individual auditor has reasonable grounds to believe that the individual auditor 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 individual auditor) that the individual auditor and the individual auditor’s employees complied with the requirements of this Subdivision.

      Note: A defendant bears an evidential burden in relation to the matters in this subsection, see subsection 13.3(3) of the Criminal Code.

      People and entities covered

      (5) The following table sets out:

      (a) the persons and entities covered by this subsection in relation to audit activity engaged in by an individual auditor; and

      (b) the items of the table in subsection 324CH(1) that are the relevant items for each of those persons and entities: