Document ID: chunk:federal_register_of_legislation:C2004A01334:clause:1_324dc:p1
Version: federal_register_of_legislation:C2004A01334
Segment Type: clause
Provision Reference: sch 1 cl 324DC (pt 1/2)
Character Range: 168443–171008

324DC  Audit firm's rotation obligation

Contraventions by members of audit firm

 (1) A person (the defendant) contravenes this subsection if:
 (a) an audit firm consents to act as a listed company's or listed registered scheme's auditor for a financial year; and
 (b) an individual acts, on behalf of the firm, as a lead or review auditor in relation to the audit of the company's or scheme's financial report for that financial year; and
 (c) the individual is not eligible to play a significant role in the audit of the company or scheme for that financial year; and
 (d) the defendant is a member of the firm; and
 (e) the defendant is not the individual and is or becomes aware that the individual is not eligible to play that role; and
 (f) the defendant fails to take the necessary steps, as soon as possible after the defendant becomes aware that the individual is not eligible to play that role, either:
 (i) to ensure that the audit firm resigns as auditor of the company or scheme; or
 (ii) to ensure that the individual ceases to act, on behalf of the audit firm, as a lead or review auditor in relation to the audit of the company or scheme for that financial year.

 (2) A person (the defendant) contravenes this subsection if:
 (a) an audit firm consents to act as a listed company's or listed registered scheme's auditor for a financial year; and
 (b) an individual acts, on behalf of the firm, as a lead or review auditor in relation to the audit of the company's or scheme's financial report for that financial year; and
 (c) the individual is not eligible to play a significant role in the audit of the company or scheme for that financial year; and
 (d) the defendant is a member of the firm.

 (3) For the purposes of an offence based on subsection (2), strict liability applies to the physical elements of the offence specified in paragraphs (2)(a), (b) and (c).

Note 1: For strict liability, see section 6.1 of the Criminal Code.

Note 2: Subsection (4) provides a defence.

 (4) A person does not commit an offence because of a contravention of subsection (2) in relation to an individual acting as lead or review auditor on behalf of an audit firm at a particular time if the person has reasonable grounds to believe that the audit firm had in place at that time a quality control system that provided reasonable assurance (taking into account the size and nature of the audit practice of the audit firm) that the audit firm and its employees complied with the requirements of this Division.

Note: A defendant bears an evidential burden