Commonwealth Numbered Acts

CORPORATIONS ACT 1989 No. 109 of 1989 - SECT 326

326. (1) Despite this Part, an exempt proprietary company that is not an
unlimited company need not appoint an auditor at an annual general meeting,
whether that meeting is the first annual general meeting held after the
company is incorporated as, or becomes, such a company or is a subsequent
annual general meeting, if not more than 1 month before the annual general
meeting all the members of the company have agreed that the company need not
appoint an auditor.

(2) The directors of an exempt proprietary company that is not an unlimited
company need not comply with subsection 327 (1) if all the members of the
company have agreed, on a day not later than 14 days after the incorporation
of the company, that the company need not appoint an auditor.

(3) Where a company, by reason of the circumstances referred to in subsection
(1) or (2), does not have an auditor, a secretary of the company shall record
a minute to that effect in the book containing the minutes of proceedings of
general meetings of the company.

(4) An exempt proprietary company that is not an unlimited company and that at
an annual general meeting did not appoint an auditor shall at the next annual
general meeting of the company appoint an auditor unless the conditions
referred to in subsection (1) are satisfied.

(5) Where:

   (a)  a directors' statement relating to accounts of a company contains a
        statement to the effect that, in respect of a financial year, the
        company:

        (i)    did not keep such accounting records as correctly record and
               explain its transactions and financial position;

        (ii)   did not so keep its accounting records that true and fair
               accounts of the company can be prepared from time to time; or

        (iii)  did not so keep its accounting records that the accounts of the
               company can be conveniently and properly audited in accordance
               with this Act;

   (b)  a directors' statement relating to accounts of a company contains a
        statement to the effect that the accounts have not been properly
        prepared by a competent person;

   (c)  a directors' statement relating to group accounts of a company
        contains a statement to the effect that the group accounts have not
        been properly prepared by a competent person; or

   (d)  a director of a company is convicted of an offence under subsection
        1308 (2) or 1309 (1) in relation to a matter that, under
        subsection 301 (9) or 302 (7), has been stated in a directors'
        statement relating to accounts or group accounts of the company; there
        shall be deemed to be a vacancy in the office of the auditor of the
        company and subsection 327 (5) applies in relation to that vacancy.

(6) In subsection (5):

   (a)  a reference to a directors' statement relating to accounts of a
        company is a reference to a statement that the directors of the
        company have, under section 301, caused to be attached to the
        accounts; and

   (b)  a reference to a directors' statement relating to group accounts of a
        company is a reference to a statement that the directors of the
        holding company have, under section 302, caused to be attached to the
        group accounts.

(7) Where a company, by reason of circumstances referred to in subsection (1)
or (2), does not have an auditor and all the members of the company have
agreed that the company should appoint an auditor, an auditor may be appointed
as if a vacancy had occurred in the office of auditor.

(8) Within 1 month after a company that, by reason of the circumstances
referred to in subsection (1) or (2), does not have an auditor ceases to be an
exempt proprietary company, the directors of the company shall appoint, unless
the company at a general meeting has appointed, a person or persons, a firm or
firms, or a person or persons and a firm or firms, as auditor or auditors of
the company.

(9) If, within 14 days after a company that has an auditor becomes an exempt
proprietary company, all the members of the company agree, this Act does not
prevent the company from terminating the appointment of the auditor and, where
the appointment is so terminated, a vacancy in the office of auditor of the
company shall be deemed not to have occurred.

(10) A person or firm appointed as auditor of a company under subsection (5)
or (8) holds office, subject to this Division, until the next annual general
meeting of the company and subsection (1) does not apply in relation to that
company.