Commonwealth Numbered Acts

CORPORATIONS ACT 1989 No. 109 of 1989 - SECT 324

324. (1) Subject to this section, a person shall not:

   (a)  consent to be appointed as auditor of a company;

   (b)  act as auditor of a company; or

   (c)  prepare a report required by this Act to be prepared by a registered
        company auditor or by an auditor of a company; if:

   (d)  the person is not a registered company auditor;

   (e)  the person, or a body corporate in which the person is a substantial
        shareholder for the purposes of Part 6.7, owes more than $5,000 to the
        company or to a related body corporate; or

   (f)  except where the company is an exempt proprietary company, the person:

        (i)    is an officer of the company;

        (ii)   is a partner, employer or employee of an officer of the
               company; or

        (iii)  is a partner or employee of an employee of an officer of the
               company.

(2) Subject to this section, a firm shall not:

   (a)  consent to be appointed as auditor of a company;

   (b)  act as auditor of a company; or

   (c)  prepare a report required by this Act to be prepared by a registered
        company auditor or by an auditor of a company; unless:

   (d)  at least 1 member of the firm is a registered company auditor who is
        ordinarily resident in Australia;

   (e)  the business name under which the firm is carrying on business is
        registered under a law of a State or Territory relating to the
        registration of business names or a return in the prescribed form has
        been lodged showing, in relation to each member of the firm, the
        member's full name and address as at the time when the firm so
        consents, acts or prepares a report;

   (f)  no member of the firm, and no body corporate in which a member of the
        firm is a substantial shareholder for the purposes of Part 6.7, owes
        more than $5,000 to the company or to a related body corporate;

   (g)  except where the company is an exempt proprietary company, no member
        of the firm is:

        (i)    an officer of the company;

        (ii)   a partner, employer or employee of an officer of the company;
               or

        (iii)  a partner or employee of an employee of an officer of the
               company; and

   (h)  except where the company is an exempt proprietary company, no officer
        of the company receives any remuneration from the firm for acting as a
        consultant to it on accounting or auditing matters.

(3) A reference in subsection (1) or (2) to indebtedness to a body corporate
does not, in relation to indebtedness of a natural person, include a reference
to indebtedness of that person to a body corporate that is a prescribed
corporation for the purposes of Part 4.5 where:

   (a)  the indebtedness arose as a result of a loan made to that person by
        the body corporate in the ordinary course of its ordinary business;
        and

   (b)  the amount of that loan was used by that person to pay the whole or
        part of the purchase price of premises that are used by that person as
        his or her principal place of residence.

(4) For the purposes of subsections (1) and (2), a person shall be deemed to
be an officer of a company if:

   (a)  the person is an officer of a related body corporate; or

   (b)  except where the Commission, if it thinks fit in the circumstances of
        the case, directs that this paragraph shall not apply in relation to
        the person in relation to the company-the person has, at any time
        within the immediately preceding period of 12 months, been an officer
        or promoter of the company or of a related body corporate.

(5) For the purposes of this section, a person shall not be taken to be an
officer of a company by reason only of being or having been the liquidator of
that company or of a related body corporate.

(6) For the purposes of this section, a person shall not be taken to be an
officer of a company by reason only of having been appointed as auditor of
that company or of a related body corporate or, for any purpose relating to
taxation, a public officer of a body corporate or by reason only of being or
having been authorised to accept on behalf of the company or a related body
corporate service of process or any notices required to be served on the
company or related body corporate.

(7) The appointment of a firm as auditor of a company shall be deemed to be an
appointment of all persons who are members of the firm and are registered
company auditors, whether resident in Australia or not, at the date of the
appointment.

(8) Where a firm that has been appointed as auditor of a company is
reconstituted by reason of the death, retirement or withdrawal of a member or
members or by reason of the admission of a new member or new members, or both:

   (a)  a person who was deemed under subsection (7) to be an auditor of the
        company and who has so retired or withdrawn from the firm as
        previously constituted shall be deemed to have resigned as auditor of
        the company as from the day of his or her retirement or withdrawal
        but, unless that person was the only member of the firm who was a
        registered company auditor and, after the retirement or withdrawal of
        that person, there is no member of the firm who is a registered
        company auditor, section 329 does not apply to that resignation;

   (b)  a person who is a registered company auditor and who is so admitted to
        the firm shall be deemed to have been appointed as an auditor of the
        company as from the day of his or her admission; and

   (c)  the reconstitution of the firm does not affect the appointment of the
        continuing members of the firm who are registered company auditors as
        auditors of the company; but nothing in this subsection affects the
        operation of subsection (2).

(9) Except as provided by subsection (8), the appointment of the members of a
firm as auditors of a company that is deemed by subsection (7) to have been
made by reason of the appointment of the firm as auditor of the company is not
affected by the dissolution of the firm.

(10) A report or notice that purports to be made or given by a firm appointed
as auditor of a company shall not be taken to be duly made or given unless it
is signed in the firm name and in his or her own name by a member of the firm
who is a registered company auditor.

(11) Without limiting the generality of section 1311, if, in contravention of
this section, a firm consents to be appointed, or acts as, auditor of a
company or prepares a report required by this Act to be prepared by an auditor
of a company, each member of the firm is guilty of an offence.

(12) Where it is, in the opinion of the Commission, impracticable for an
exempt proprietary company to obtain the services of a registered company
auditor as auditor of the company by reason of the place where the company
carries on business, a person who is, in the opinion of the Commission,
suitably qualified or experienced and is approved by the Commission for the
purposes of this Act in relation to the audit of the company's accounts may be
appointed as auditor of the company, subject to such terms and conditions as
are specified in the approval.

(13) A person appointed in accordance with subsection (12) shall, in relation
to the auditing of the company's accounts and, if it is a holding company for
which group accounts are required, group accounts but subject to the terms and
conditions of the approval under that subsection, be deemed to be a registered
company auditor and the provisions of this Act shall, with the necessary
modifications, apply in relation to the person accordingly.

(14) Where a person approved by the Commission under subsection (12) is acting
as auditor of a company, the Commission may at any time, by notice in writing
given to the company:

   (a)  amend, revoke or vary the terms and conditions of its approval; or

   (b)  terminate the appointment of that person as auditor of the company.

(15) A notice under subsection (14) terminating the appointment of a person as
auditor of a company takes effect as if, on the date on which the notice is
received by the company, the company had received from the person notice of
the person's resignation as auditor taking effect from that date.

(16) A person shall not:

   (a)  if the person has been appointed auditor of a company-knowingly
        disqualify himself or herself while the appointment continues from
        acting as auditor of the company; or

   (b)  if the person is a member of a firm that has been appointed auditor of
        a company-knowingly disqualify the firm while the appointment
        continues from acting as auditor of the company.