Document ID: chunk:federal_register_of_legislation:C2025C00185:section:324cc:p1
Version: federal_register_of_legislation:C2025C00185
Segment Type: section
Provision Reference: s 324CC (pt 1/3)
Character Range: 1211256–1213950

324CC  General requirement for auditor independence—director of audit company

Contravention by director of audit company
 (1) A person (the defendant) contravenes this subsection if:
 (a) an audit company engages in audit activity in relation to an 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) the defendant is a director of the audit company at that time; and
 (d) the defendant is or becomes aware of the circumstances referred to in paragraphs (a) and (b); and
 (e) the defendant does not, as soon as possible after the defendant becomes aware of those circumstances, take reasonable steps to ensure that the conflict of interest situation ceases to exist.
Note 1: For conflict of interest situation, see section 324CD.
Note 2: The audit company itself will commit an offence based on the contravention of subsection 324AA(1).

Director of audit company to notify ASIC
 (1A) A person (the defendant) contravenes this subsection if:
 (a) an audit company is the auditor of an audited body; and
 (b) a conflict of interest situation exists in relation to the audited body while the audit company is the auditor of the audited body; and
 (c) the defendant is a director of the audit company at a time when the conflict of interest situation exists; 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 conflict of interest situation remains in existence; and
 (ii) ASIC has not been informed in writing by the defendant, by another director of the audit company or by the audit company that the conflict of interest situation exists.
Note 1: For conflict of interest situation, see section 324CD.
Note 2: If the audited body is a public company, a registered scheme or a registrable superannuation entity, 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(2C) (public company); or
(b) subsection 328E(5) (public company with crowd‑sourced funding); or
(c) subsection 331AAA(2C) (registered scheme); or
(d) subsection 331AH(5) (registrable superannuation entity).
 (1B) A person is not excused from informing ASIC under subsection (1A) that a conflict of interest situation exists on the ground that the information might tend to incriminate the person or expose the person to a penalty.
 (1C) However, if the person is a natural person:
 (a)