Document ID: chunk:federal_register_of_legislation:C2004A01334:clause:1_12:p1
Version: federal_register_of_legislation:C2004A01334
Segment Type: clause
Provision Reference: sch 1 cl 12 (pt 1/2)
Character Range: 131642–134513

12          a person who:                                                                                                                                                                        1 and 2
            (a) is a former professional employee of the firm; and
            (b) does not satisfy the independence test in subsection (7)

Maximum hours test

 (6) A non‑audit services provider satisfies the maximum hours test in this subsection if:
 (a) the number of hours for which the person provides services (other than services related to the conduct of an audit) to the audited body on behalf of the auditor during the period to which the audit relates does not exceed 10 hours; and
 (b) the number of hours for which the person provided services (other than services related to the conduct of an audit) to the audited body on behalf of the auditor during the 12 months immediately before the beginning of the period to which the audit relates does not exceed 10 hours.
In a prosecution for an offence based on subsection (1) or (2), the prosecution must prove that the non‑audit services provider did not satisfy the maximum hours test in this subsection.

Independence test

 (7) A person satisfies the independence test in this subsection in relation to a firm if the person:
 (a) does not influence the operations or financial policies of the accounting and audit practice conducted by the firm; and
 (b) does not participate, or appear to participate, in the business or professional activities of the accounting and audit practice conducted by the firm; and
 (c) does not have any rights against the firm, or the members of the firm, in relation to the accounting and audit practice conducted by the firm in relation to the termination of, or the value of, the person's former partnership interest in the firm; and
 (d) has no financial arrangements with the firm in relation to the accounting and audit practice conducted by the firm, other than:
 (i) an arrangement providing for regular payments of a fixed pre‑determined dollar amount which is not dependent, directly or indirectly, on the revenues, profits or earnings of the firm; or
 (ii) an arrangement providing for regular payments of a dollar amount where the method of calculating the dollar amount is fixed and is not dependent, directly or indirectly, on the revenues, profits or earnings of the firm; and
 (e) without limiting paragraph (d), has no financial arrangement with the firm to receive a commission or similar payment in relation to business generated by the person for the accounting and audit practice conducted by the firm.
In a prosecution for an offence based on subsection (1) or (2), the prosecution must prove that the person did not satisfy the independence test in this subsection in relation to the firm.

 (8) In applying subsection (7), disregard any rights that