ASIC today released a consultation paper announcing a review into our approach to the resignation, removal and replacement of auditors.
ASIC’s existing regulatory guides RG 26 Resignation of auditors (RG 26) and RG 136 Managed investments: Discretionary powers and closely related schemes (RG 136), provide guidance on ASIC’s approach to consenting to the resignation of public company auditors, and to the resignation and removal of scheme auditors.
Consultation Paper 209 Resignation, removal and replacement of auditors: Update to RG 26 (CP 209) seeks views on matters such as whether ASIC should continue to:
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normally consent to the resignation of a public company auditor at the next annual general meeting
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normally consent to the resignation or removal of scheme auditors within one month after lodgement of the annual audit report, and
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continue to give consent only if the entity has obtained a possible replacement auditor.
We will be considering whether to fundamentally change our approach to consenting to the resignation, removal and replacement of auditors with regard to feedback received, legislative independence requirements introduced since the current regulatory guide was issued, and experiences under our current approach and those in other jurisdictions.
To assist in making submissions the consultation paper includes a draft updated RG 26 Resignation, removal and replacement of auditors that illustrates ASIC’s current approach. These updated materials are illustrative only and would be substantially revised if ASIC changes its existing policy approach.
Unlike the current regulatory guide, the draft updated RG 26 includes the possible approach to resignation, removal or replacement of auditors of AFS licensees and credit licensee trust accounts.
It also provides more transparency on our current policy approach, including additional examples of what may or may not constitute circumstances for early consent to auditor resignation, removal and replacement.
Submissions on CP 209 close on 30 August 2013.
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Background
ASIC consent is required under legislation for the resignation of public company auditors, the resignation and removal of scheme or Australian financial services (AFS) licensee auditors, and the resignation or replacement of auditors or Australian credit licensee trust accounts. The updated RG 26 will set out ASIC’s approach to giving such consent.