Section 324CF(1A) and (2) of the Corporations Act 2001 (Cth) is ‘Auditor Independence Specific Requirements for Audit Firm’ and is extracted below.
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Section 324CF(1A) and (2) of the Corporations Act 2001 (Cth) is Auditor Independence Specific Requirements for Audit Firm and reads as follows:
Auditor Independence Specific Requirements for Audit Firm
Member of audit firm to notify ASIC
(1A) A person (the defendant ) contravenes this subsection if:
(a) an audit firm is the auditor of an audited body; and
(b) a relevant item of the table in subsection 324CH(1) applies to a person or entity covered by subsection (5) of this section while the audit firm is the auditor of the audited body; and
(c) the defendant is a member of the audit firm at a time when the circumstances referred to in paragraph (b) exist; and
(d) on a particular day (the start day ), the defendant becomes aware of the circumstances referred to in paragraphs (a) and (b); and
(e) at the end of the period of 7 days from the start day:
(i) the circumstances referred to in paragraph (b) remain in existence; and
(ii) ASIC has not been informed in writing of those circumstances by the defendant, by another member of the audit firm or by someone else on behalf of the audit firm.
Note: If the audited body is a public company or a registered scheme, the audit appointment will be terminated at the end of the period of 21 days (or a longer period that has been approved by ASIC) from the day a notice under this subsection is given if the notice is not followed up by a notice under:
(a) subsection 327B(2B) (public company); or
(b) subsection 328E(4) (public company with crowd-sourced funding); or
(c) subsection 331AAA(2B) (registered scheme).
Contravention of independence requirements by members of audit firm
(2) A person (the defendant ) contravenes this subsection if:
(a) an audit firm engages in audit activity at a particular time; and
(b) a relevant item of the table in subsection 324CH(1) applies at that time to a person or entity covered by subsection (5) of this section; and
(c) the defendant is a member of the audit firm at that time.
The maximum penalty for the offence of Contents of Notice of Meetings of Members is:
30 penalty units (a Commonwealth penalty unit is currently $210).
However, it should be kept in mind that maximum penalties are reserved for the most serious cases.
Your legal team will be able to advise you of the essential elements the prosecution would need to prove in order to establish the offence, whether those elements are capable of being established in your particular situation, the most effective and efficient way forward and the likely outcome.
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