ASIC today announced a fundamental change to its approach to consenting to the resignation, removal and replacement of auditors.
ASIC will now generally consent to the resignation of an auditor at any time of the year, subject to some conditions. Previously, ASIC only consented to the resignation of an auditor of a public company to take place at an annual general meeting (AGM) unless there were exceptional circumstances.
ASIC Commissioner John Price said ASIC's changed approach would cut red tape and give greater flexibility in the timing of changes of auditors.
ASIC will consent to the resignation of an auditor at any time if:
- we have no concerns in connection with the resignation, such as a concern where there is a disagreement between management and the auditor over an accounting treatment; and
- the change in auditor and the reasons for the change are communicated to members or in a disclosure notice, unless the change occurs at an AGM of a public company.
The new approach is outlined in a revised Regulatory Guide 26 Resignation, removal and replacement of auditors (RG 26) and is broadly consistent with the approach in major jurisdictions around the world.
The revised RG 26 also sets out how to apply for ASIC consent to the resignation, removal and replacement of auditors of registered schemes, Australian Financial Services licensees and credit licensee trust accounts.