ASIC updates guidance for auditors on expanded obligations
The updated guidances concerns the resignation, removal and replacement of auditors and follows the implementation of recent reforms.
Yesterday, ASIC announced it had made changes and updated guidance for auditors following extensions to financial reporting and audit obligations.
The updates were made to Regulatory Guide 26 Regulation, removal and replacement of auditors (RG 26) and reflect expanded obligations applied regarding registrable superannuation entities (RSEs) and retail corporate collective investment vehicles (retail CCIVs).
“RG 26 is a guide for public companies, responsible entities of registered managed investment schemes, AFS licensees, credit licensees, RSE licensees, retail CCIVs and their appointed auditors,” ASIC said.
“It provides guidance and sets out the policies and principles that influence how we may exercise ASIC’s powers to give consent or approval for the resignation, removal and replacement of auditors.”
The corporate regulator noted the main revision it made to RG 26 was how it could exercise powers to give consent to the resignation or removal of an auditor of an RSE or retail CCIV.
ASIC said the updates required information for resignation and removal applications and relevant effective dates.
The revisions to RG 26 also included clarifications that were needed since the original publication of RG 26 in June 2015.
The revisions and clarifications included:
· Relevant disclosure obligations and the effective date of the resignation and removal of auditors (as applicable) for public companies, registered schemes and AFS licensees.
· The regulator's approach in regard to the resignation and removal of auditors of public companies registered with the Australian charities and not-for-profits commission.
· Circumstances which may have resulted in a change of auditor.
· Reasonable timeframes for submitting auditor resignation, removal and replacement applications.
Additionally, ASIC said it provided further guidance in relevant information sheets for companies, registered schemes and credit licensees.
It also released three new information sheets for RSEs, retail CCIVs and AFS licensees.
ASIC said these changes followed the implementation of reforms under the Treasury Laws Amendment Act 2023 which was effective 1 July 2023.
The reforms extended the financial reporting and auditing obligations under Chapter 2M of the Corporations Act 2001 to most RSEs.
“Application for ASIC consent to resign as an auditor of a public company or an RSE must be completed through ASIC’s regulatory portal,” the regulator said.
“Through this portal, RSEs must also apply for ASIC consent to remove its auditor.”
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