Commonwealth Consolidated Regulations Commonwealth Consolidated Regulations(1) An audit team leader must not breach a requirement of this regulation in relation to an audited body for a Part 6 audit.
Note: Regulation 6.71 empowers the Regulator to grant exemptions from the general independence requirements.
Must take steps to resolve conflict of interest situation or apply for exemption from requirements
(2) If:
(a) the audit team leader engages in audit activity in relation to the audited body at a particular time; and
(b) a conflict of interest situation exists in relation to the audited body at that time; and
(c) at that time the audit team leader is aware that the conflict of interest situation exists;
the audit team leader must, as soon as possible after he or she becomes aware that the conflict of interest situation exists, take all reasonable steps to ensure that the conflict of interest situation ceases to exist.
Note: For conflict of interest situation see regulation 6.49.
Requirement if conflict of interest situation relates to the audit team leader
(3) If:
(a) the audit team leader is carrying out the audit; and
(b) a conflict of interest situation exists in relation to the audited body while the audit team leader is the audit team leader for the audit; and
(c) the conflict of interest situation exists in relation to the audit team leader; and
(d) on a particular day (the start day ) the audit team leader becomes aware that the conflict of interest situation exists; and
(e) at the end of the period of 21 days from the start day the conflict of interest situation remains in existence;
then the audit team leader must cease to be the audit team leader within 7 days after the end of that period and notify the Regulator and the audited body in writing accordingly.
Requirement if conflict of interest situation relates to other professional member of the audit team
(4) If:
(a) the audit team leader is carrying out the audit; and
(b) a conflict of interest situation exists in relation to the audited body while the audit team leader is the audit team leader for the audit; and
(c) the conflict of interest situation exists in relation to a professional member of the audit team (other than the audit team leader); and
(d) on a particular day (the start day ) the audit team leader becomes aware that the conflict of interest situation exists;
then, before the end of the period of 21 days after the start day, the audit team leader must apply under regulation 6.71 for an exemption from the requirements of this regulation for the conflict of interest situation.
Copy of application for exemption must be given to audited body
(5) If the audit team leader applies for the exemption as required by subregulation (4), the audit team leader must, as soon as practicable after the notice has been received by the Regulator, give a copy of the application to the audited body.
Audit team member must cease to be audit team member if no exemption applied for
(6) If the audit team leader does not apply for the exemption as required by subregulation (4), the audit team leader must ensure that the audit team member in the conflict of interest situation ceases to be an audit team member in relation to the audit at the end of the period of 21 days mentioned in that subregulation.
Audit team member must cease to be audit team member if no exemption granted
(7) If:
(a) the audit team leader applies for the exemption as required by subregulation (4); and
(b) the Regulator refuses to grant the exemption in relation to the audit team member in the conflict of interest situation;
then the audit team leader must ensure that the audit team member ceases to be an audit team member in relation to the audit at the end of the period of 7 days after the Regulator refuses the exemption.
Quality control system
(8) The audit team leader breaches the requirements of this subregulation if:
(a) the audit team leader engages in audit activity in relation to the audited body at a particular time; and
(b) a conflict of interest situation exists in relation to the audited body at that time; and
(c) at that time the audit team leader is not aware that the conflict of interest situation exists; and
(d) the audit team leader would have been aware of the existence of the conflict of interest situation at that time if the audit team leader had had in place a quality control system reasonably capable of making the audit team leader aware of the existence of such a conflict of interest situation.