Corporations Act 2001

CHAPTER 2M - FINANCIAL REPORTS AND AUDIT  

PART 2M.6 - EXEMPTIONS AND MODIFICATIONS  

SECTION 340   EXEMPTION ORDERS - COMPANIES, REGISTERED SCHEMES, REGISTRABLE SUPERANNUATION ENTITIES AND DISCLOSING ENTITIES  

340(1)    

On an application made in accordance with subsection (3) in relation to a company, registered scheme, registrable superannuation entity or disclosing entity, ASIC may make an order in writing relieving any of the following from all or specified requirements of Parts 2M.2 , 2M.3 and 2M.4 (other than Division 4 ):

(a)    the directors;

(b)    the company, scheme or entity;

(c)    the auditor.

Note: For the criteria for making orders under this section, see section 342 .

340(2)    
The order may:

(a)    be expressed to be subject to conditions; and

(b)    be indefinite or limited to a specified period.

340(3)    
The application must be:

(a)    authorised by a resolution of the directors; and

(b)    in writing and signed by a director; and

(c)    lodged with ASIC.

340(4)    
ASIC must give the applicant written notice of the making, revocation or suspension of the order.

SECTION 340A   EXEMPTION ORDERS - NOTIFIED FOREIGN PASSPORT FUNDS  

340A(1)    
On an application made in accordance with subsection (3) in relation to a notified foreign passport fund, ASIC may make an order, in writing, relieving any of the following from all or specified requirements of Part 2M.3 :

(a) a notified foreign passport fund;

(b) the operator of a notified foreign passport fund;

(c) directors of the operator of a notified foreign passport fund.

Note: For the criteria for making orders under this section, see section 342 .

340A(2)    
The order may:

(a) be expressed to be subject to conditions; and

(b) be indefinite or limited to a specified period.

340A(3)    
The application must be:

(a) authorised by the operator of the notified foreign passport fund; and

(b) in writing; and

(c) lodged with ASIC.

340A(4)    
ASIC must give the applicant written notice of the making, revocation or suspension of the order.

SECTION 341   EXEMPTION ORDERS - CLASS ORDERS FOR COMPANIES, REGISTERED SCHEMES, REGISTRABLE SUPERANNUATION ENTITIES AND DISCLOSING ENTITIES  

341(1)    

ASIC may make an order in writing in respect of a specified class of companies, registered schemes, registrable superannuation entities or disclosing entities, relieving any of the following from all or specified requirements of Parts 2M.2 , 2M.3 and 2M.4 (other than Division 4 ):

(a)    directors;

(b)    the companies, registered schemes, registrable superannuation entities or disclosing entities themselves;

(c)    auditors of the companies, registered schemes, registrable superannuation entities or disclosing entities.

Note: For the criteria for making orders under this section, see section 342 .

341(2)    
The order may:

(a)    be expressed to be subject to conditions; and

(b)    be indefinite or limited to a specified period.

341(3)    
Notice of the making, revocation or suspension of the order must be published in the Gazette .

SECTION 341A   EXEMPTION ORDERS - CLASS ORDERS FOR NOTIFIED FOREIGN PASSPORT FUNDS  

341A(1)    
ASIC may, by legislative instrument, make an order in respect of a specified class of notified foreign passport funds, relieving any of the following from all or specified requirements of Part 2M.3 :

(a) notified foreign passport funds;

(b) the operators of notified foreign passport funds;

(c) the directors of the operators of notified foreign passport funds.

Note: For the criteria for making orders under this section, see section 342 .

341A(2)    
The order may:

(a) be expressed to be subject to conditions; and

(b) be indefinite or limited to a specified period.

SECTION 342   EXEMPTION ORDERS - CRITERIA FOR ORDERS FOR COMPANIES, REGISTERED SCHEMES, REGISTRABLE SUPERANNUATION ENTITIES, NOTIFIED FOREIGN PASSPORT FUNDS AND DISCLOSING ENTITIES  

342(1)    

To make an order under section 340 , 340A , 341 or 341A , ASIC must be satisfied that complying with the relevant requirements of Parts 2M.2 , 2M.3 and 2M.4 would:

(a)    make the financial report or other reports misleading; or

(b)    be inappropriate in the circumstances; or

(c)    impose unreasonable burdens.

342(2)    
In deciding for the purposes of subsection (1) whether the audit requirements for a proprietary company, or a class of proprietary companies, would impose an unreasonable burden on the company or companies, ASIC is to have regard to:

(a)    the expected costs of complying with the audit requirements; and

(b)    the expected benefits of having the company or companies comply with the audit requirements; and

(c)    any practical difficulties that the company or companies face in complying effectively with the audit requirements (in particular, any difficulties that arise because a financial year is the first one for which the audit requirements apply or because the company or companies are likely to move frequently between the small and large proprietary company categories from one financial year to another); and

(d)    any unusual aspects of the operation of the company or companies during the financial year concerned; and

(e)    any other matters that ASIC considers relevant.

342(3)    
In assessing expected benefits under subsection (2) , ASIC is to take account of:

(a)    the number of creditors and potential creditors; and

(b)    the position of creditors and potential creditors (in particular, their ability to independently obtain financial information about the company or companies); and

(c)    the nature and extent of the liabilities of the company or companies.

SECTION 342AA   EXEMPTION ORDERS - NON-AUDITOR MEMBERS AND FORMER MEMBERS OF AUDIT FIRMS; FORMER EMPLOYEES OF AUDIT COMPANIES  

342AA(1)   [ Modification of auditor independence requirements]  

On an application made in accordance with subsection (3) by any of the following, ASIC may make an order in writing relieving the applicant from all or specified requirements of Division 3 of Part 2M.4 (auditor independence):

(a) a member of the firm who is not a registered company auditor;

(b) a person who has ceased to be:

(i) a member of an audit firm; or

(ii) a director of an audit company; or

(iii) a professional employee of an audit company.

Note: For the criteria for making orders under this section, see section 342AC .

342AA(2)   [ Conditions of order]  

The order may:

(a) be expressed to be subject to conditions; and

(b) be indefinite or limited to a specified period.

342AA(3)   [ Application requirements]  

The application must be:

(a) in writing and signed by the applicant; and

(b) lodged with ASIC.

342AA(4)   [ Notice]  

ASIC must give the applicant written notice of the making, revocation or suspension of the order.

342AA(5)   [ Order not a legislative instrument]  

An order under subsection (1) is not a legislative instrument.

SECTION 342AB   EXEMPTION ORDERS - CLASS ORDERS FOR NON-AUDITOR MEMBERS ETC.  

342AB(1)   [ Modification of auditor independence requirements]  

ASIC may make an order in writing in respect of a specified class of audit firms or audit companies, relieving any of the following from all or specified requirements of Division 3 of Part 2M.4 (auditor independence):

(a) members of firms who are not registered company auditors;

(b) persons who have ceased to be:

(i) members of audit firms; or

(ii) directors of audit companies; or

(iii) professional employees of audit companies.

Note: For the criteria for making orders under this section, see section 342AC .

342AB(2)   [ Conditions or order]  

The order may:

(a) be expressed to be subject to conditions; and

(b) be indefinite or limited to a specified period.

342AB(3)   [ Order not a legislative instrument]  

An order under subsection (1) is a legislative instrument.

SECTION 342AC  

342AC   EXEMPTION ORDERS - CRITERIA FOR ORDERS FOR NON-AUDITOR MEMBERS ETC.  

To make an order under section 342AA or 342AB , ASIC must be satisfied that complying with the relevant requirements of Division 3 of Part 2M.4 would:

(a) make the financial report or other reports misleading; or

(b) be inappropriate in the circumstances; or

(c) impose unreasonable burdens.

SECTION 342A   ASIC ' S POWER TO MODIFY THE OPERATION OF SECTION 324DA  

342A(1)    
On an application made in accordance with this section, ASIC may:

(a)    declare that subsection 324DA(1) applies to a registered company auditor, in relation to the audit of an audited body or a class of audited bodies, as if the references in that subsection to 5 successive financial years were references to:

(i) 6 successive financial years; or

(ii) 7 successive financial years; or

(b)    declare that subsection 324DA(2) applies to a registered company auditor, in relation to the audit of an audited body or a class of audited bodies during a particular period of 7 successive financial years, as if the reference in that subsection to 5 out of 7 successive financial years were a reference to 6 out of 7 successive financial years.

342A(2)    
The following persons may apply for the declaration:

(a)    the registered company auditor;

(b)    a firm or company on whose behalf the registered company auditor acts or would act in relation to the audit or audits.

If the application is made by a firm or company, the declaration has effect only in relation to activities undertaken by the registered company auditor on behalf of that firm or company.

342A(3)    
The application must be:

(a)    in writing; and

(b)    signed by the applicant; and

(c)    lodged with ASIC.

342A(4)    
If the application is made by a registered company auditor who engages, or is to engage, in audit activities on behalf of a firm or company, the application must include the firm ' s or company ' s written consent to the application.

342A(5)    
If the application is made by a firm or company in relation to a registered company auditor, the application must include the registered company auditor ' s written consent to the application.

342A(5A)    

Before making a declaration in relation to the audit of a registrable superannuation entity or a class of registrable superannuation entities, ASIC must consult APRA.

342A(6)    
To make a declaration under subsection (1) , ASIC must be satisfied that, without the modification, Division 4 of Part 2M.4 would impose an unreasonable burden on:

(a)    a registered company auditor; or

(b)    a firm or company that is applying for the declaration; or

(c)    the audited body or bodies in relation to which the application was made.

342A(7)    
In deciding for the purposes of subsection (6) whether, without the modification, Division 4 of Part 2M.4 would impose an unreasonable burden on a person referred to in that subsection, ASIC is to have regard to:

(a)    the nature of the audited body or bodies, including whether the activity in which the audited body or bodies engage is such that specialist knowledge about that activity is necessary to carry out the audit properly; and

(b)    the availability of other registered company auditors capable of providing satisfactory audit services for the audited body or bodies; and

(c)    any other matters which ASIC considers relevant.

342A(8)    
ASIC must give the applicant written notice of the making, revocation or suspension of the declaration.

342A(9)    

If ASIC makes a declaration in relation to the audit of a registrable superannuation entity or a class of registrable superannuation entities, ASIC must:

(a)    notify APRA of the declaration; and

(b)    do so as soon as practicable after making the declaration.

SECTION 342B   AUDITOR TO NOTIFY COMPANY, REGISTERED SCHEME OR REGISTRABLE SUPERANNUATION ENTITY OF SECTION 342A DECLARATION  

342B(1)    

If a registered company auditor plays a significant role in the audit of a company, registered scheme or registrable superannuation entity in reliance on a declaration by ASIC under section 342A , the auditor must give:

(a)    the company; or

(b)    the responsible entity for the registered scheme; or

(c)    the registrable superannuation entity;

written notice of the declaration.

342B(2)    
The notice must specify:

(a)    the name of the registered company auditor; and

(b)    

the additional financial years for which the registered company auditor is, because of the declaration under section 342A , eligible to play a significant role in the audit of the company, registered scheme or registrable superannuation entity.

342B(3)    
The notice must be given:

(a)    as soon as practicable after the declaration is made if the auditor has been appointed before the declaration is made; or

(b)    before the auditor is appointed if the declaration is made before the auditor is appointed.

SECTION 343  

343   MODIFICATION BY REGULATIONS  
The regulations may modify the operation of this Chapter in relation to:

(a) a specified company, registered scheme, notified foreign passport fund or disclosing entity; or

(b) all companies, registered schemes, notified foreign passport funds or disclosing entities of a specified kind.

SECTION 343A   MINISTER MAY APPLY THE CHAPTER TO NOTIFIED FOREIGN PASSPORT FUNDS  

343A(1)    
The Minister may, by legislative instrument:

(a) order that this Chapter, or provisions of this Chapter specified in the legislative instrument, are to apply in relation to one or more of the following:

(i) notified foreign passport funds the home economy for which is specified in the legislative instrument;

(ii) operators and other entities connected with notified foreign passport funds the home economy for which is specified in the legislative instrument; and

(b) modify the operation of this Chapter, or those provisions of this Chapter specified in the legislative instrument, for the purpose of giving effect to an order under paragraph (a).

343A(2)    
The legislative instrument has effect according to its terms.