Commonwealth Numbered Acts

CORPORATIONS ACT 1989 No. 109 of 1989 - SECT 327

327. (1) Within 1 month after the day on which a company is incorporated, 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.

(2) A person or firm appointed as auditor of a company under subsection (1)
holds office, subject to this Part, until the first annual general meeting of
the company.

(3) A company shall:

   (a)  at its first annual general meeting appoint 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; and

   (b)  at each subsequent annual general meeting, if there is a vacancy in
        the office of auditor of the company, appoint a person or persons, a
        firm or firms, or a person or persons and a firm or firms, to fill the
        vacancy.

(4) A person or firm appointed as auditor under subsection (3) holds office
until death or removal or resignation from office in accordance with section 
329 or until ceasing to be capable of acting as auditor by reason of
subsection 324 (1) or (2).

(5) Within 1 month after a vacancy, other than a vacancy caused by the removal
of an auditor from office, occurs in the office of auditor of the company, if
there is no surviving or continuing auditor of the company, the directors
shall, unless:

   (a)  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, to fill the
        vacancy; or

   (b)  where the company is an exempt proprietary company, all the members of
        the company have within 1 month after the vacancy occurs agreed that
        it is not necessary for the vacancy to be filled; appoint a person or
        persons, a firm or firms, or a person or persons and a firm or firms,
        to fill the vacancy.

(6) While a vacancy in the office of auditor continues, the surviving or
continuing auditor or auditors (if any) may act.

(7) A company or the directors of a company shall not appoint a person or firm
as auditor of the company unless that person or firm has, before the
appointment, consented by notice in writing given to the company or to the
directors to act as auditor and has not withdrawn his, her or its consent by
notice in writing given to the company or to the directors.

(8) A notice under subsection (7) given by a firm shall be signed in the firm
name and in his or her own name by a member of the firm who is a registered
company auditor.

(9) If a company appoints a person or firm as auditor of a company in
contravention of subsection (7), the purported appointment does not have any
effect and the company and any officer of the company who is in default are
each guilty of an offence.

(10) Where an auditor of a company is removed from office at a general meeting
in accordance with section 329:

   (a)  the company may at that meeting (without adjournment), by a resolution
        passed by a majority of not less than three-quarters of such members
        of the company as, being entitled so to do, vote in person or, where
        proxies are allowed, by proxy, forthwith appoint as auditor or
        auditors a person or persons, a firm or firms, or a person or persons
        and a firm or firms, to whom or which has been sent a copy of the
        notice of nomination in accordance with sub-section 328 (3); or

   (b)  if such a resolution is not passed or, by reason only that such a copy
        of the notice of nomination has not been sent to a person, could not
        be passed, the meeting may be adjourned to a day not earlier than 20
        days and not later than 30 days after the day of the meeting and the
        company may, at the adjourned meeting, by ordinary resolution appoint
        as auditor or auditors a person or persons, a firm or firms, or a
        person or persons and a firm or firms, notice of whose nomination for
        appointment as auditor has been received by the company from a member
        of the company at least 14 clear days before the day to which the
        meeting is adjourned.

(11) Where, after the removal from office of an auditor of a company, the
company fails to appoint an auditor under subsection (1), the company shall,
within the period of 7 days commencing on the day of the failure, give to the
Commission notice of the failure, and, subject to subsection (12), the
Commission:

   (a)  in a case where the company, before the end of that period, gives to
        the Commission notice of the failure-shall, upon receiving the notice;
        or

   (b)  in any other case:

        (i)    may, at any time after the end of that period and before the
               Commission receives from the company notice of the failure; and

        (ii)   if the company, after the end of that period, gives to the
               Commission notice of the failure-shall, upon receiving the
               notice; appoint as auditor or auditors of the company a person
               or persons, a firm or firms, or a person or persons and a firm
               or firms, who or which consents or consent to be so appointed.

(12) Where, after the removal from office of an auditor of a company, the
company fails to appoint an auditor under subsection (10), the Commission
shall not appoint an auditor of the company under subsection (11):

   (a)  in any case-if there is another auditor of the company whom the
        Commission believes to be able to carry out the responsibilities of
        auditor alone and who agrees to continue as auditor;

   (b)  in the case of an exempt proprietary company-if:

        (i)    all the members have, since the removal from office of the
               first-mentioned auditor, agreed that it is not necessary for an
               auditor to be appointed; and

        (ii)   the company has given to the Commission notice of the failure
               and has, at the time of giving to the Commission notice of the
               failure, given to the Commission notice that all the members
               have so agreed; or

   (c)  in a case where, at the end of the period of 7 days commencing on the
        day of the failure, the company has not given to the Commission notice
        of the failure-if the Commission has, at any time after the end of
        that period, already appointed an auditor of the company under
        subsection (11).

(13) Subject to subsection (11), if a company does not appoint an auditor when
required by this Act to do so, the Commission may, on the application in
writing of a member of the company, appoint as auditor or auditors of the
company a person or persons, a firm or firms, or a person or persons and a
firm or firms, who or which consents or consent to be so appointed.

(14) A person or firm appointed as auditor of a company under sub-section (5),
(10), (11) or (13) holds office, subject to this Division, until the next
annual general meeting of the company.

(15) Notwithstanding subsection (4), a person or firm who holds the office of
auditor of a company that becomes a subsidiary of a corporation shall, unless
the person or firm sooner vacates that office, retire at the annual general
meeting of that subsidiary next held after it becomes such a subsidiary but,
subject to this Division, is eligible for re-appointment.

(16) If a director of a company fails to take all reasonable steps to comply
with, or to secure compliance with, subsection (1) or (5), he or she is guilty
of an offence.