Corporations Act 2001

CHAPTER 2M - FINANCIAL REPORTS AND AUDIT  

PART 2M.4 - APPOINTMENT AND REMOVAL OF AUDITORS  

Division 5 - Auditor rotation for listed companies, listed registered schemes and registrable superannuation entities  

SECTION 324DAB   REQUIREMENTS FOR DIRECTORS TO APPROVE EXTENSION OF ELIGIBILITY TERM  

Requirements if company, scheme or entity has audit committee

324DAB(1)    

If a listed company, the responsible entity of a listed registered scheme, or the RSE licensee for a registrable superannuation entity, has an audit committee:

(a)    an approval under section 324DAA must not be granted unless it is in accordance with a recommendation provided by the audit committee; and

(b)    the resolution granting the approval must set out the reasons why the audit committee is satisfied as mentioned in paragraph (2)(d) of this section.

Note: Directors are not required to grant an approval merely because the audit committee has recommended that an approval be granted.

324DAB(2)    
An approval is taken to be made in accordance with a recommendation provided by the audit committee only if:

(a)    the approval is consistent with the audit committee ' s recommendation; and

(b)    the recommendation is endorsed by a resolution passed by the members of the audit committee; and

(c)    

the recommendation is in writing signed by a member of the audit committee on behalf of the audit committee and given to the directors of the company, scheme or entity; and

(d)    

the recommendation states that the audit committee is satisfied that the approval:

(i) is consistent with maintaining the quality of the audit provided to the company, scheme or entity; and

(ii) would not give rise to a conflict of interest situation (as defined in section 324CD );

and sets out the reasons why the committee is so satisfied.

Requirements if company or scheme does not have audit committee

324DAB(3)    
If a listed company, or the responsible entity of a listed registered scheme, does not have an audit committee:

(a)    an approval under section 324DAA must not be granted unless the directors of the company or scheme are satisfied that the approval:

(i) is consistent with maintaining the quality of the audit provided to the company or scheme; and

(ii) would not give rise to a conflict of interest situation (as defined in section 324CD ); and

(b)    the resolution granting the approval must set out the reasons why the directors are so satisfied.

Auditor must have agreed to extension

324DAB(4)    

The directors of a listed company, of a listed registered scheme or of a registrable superannuation entity, must not grant an approval under section 324DAA unless:

(a)    if the individual to whom the approval relates does not act on behalf of an audit firm or company - the individual agrees, in writing, to the approval being granted; or

(b)    if the individual to whom the approval relates acts on behalf of an audit firm or company - the audit firm or company on whose behalf the individual acts agrees, in writing, to the approval being granted.