Following public consultation, ASIC has remade three legislative instruments that affect financial reporting by companies. The relief is set out in the following new legislative instruments:
- ASIC Corporations (Audit Relief) Instrument 2016/784 (replaces Class Order 98/1417)
- ASIC Corporations (Wholly owned Companies) Instrument 2016/785 (replaces Class Order 98/1418)
- ASIC Corporations (Qualified Accountant) Instrument 2016/786 (replaces Class Order 01/1256).
See ‘Background’ below for further information on these three instruments.
ASIC remade these instruments without significant changes before they were due to sunset under the Legislation Act 2003.
ASIC has released updated versions of the following documents related to audit relief for certain proprietary companies:
- Regulatory Guide 115 Audit relief for proprietary companies
- Pro Forma 183 Deed of subordination
ASIC has also released updated versions of the following documents related to relief for certain wholly owned companies:
- Pro Formas 24 Deed of cross guarantee, PF 25 Notice of disposal, PF 26 Revocation deed, and PF 27 Assumption deed
- Information Sheet 24 Deeds of cross-guarantee
The new instruments can be found at legislation.gov.au and the other documents can be found at asic.gov.au.
In addition, Class Orders [CO 98/106] Financial reports of superannuation funds, approved deposit funds and pooled superannuation trusts and [CO 99/1225] Financial reporting requirements for benefit fund friendly societies have been repealed as they are no longer necessary or useful. [CO 99/1225] ceased to be operative more than ten years ago.
Background
The instruments:
- provide relief to large proprietary companies and certain small foreign-controlled proprietary companies from the need to appoint an auditor and have their financial report audited
- relieve wholly owned companies from the need to prepare and have audited a financial report, provided they enter into a deed of cross-guarantee with their holding company and other wholly owned companies
- specify the classes of accountants who are qualified accountants for particular purposes under the Corporations Act 2001, particularly giving sophisticated investor certificates.
A consequence of remaking Class Order [CO 98/1418] as an ASIC instrument is that in order to join a company to a deed of cross-guarantee executed before the commencement of ASIC Corporations (Wholly owned Companies) Instrument 2016/785 a new deed will need to be executed or the pre-existing deed varied to reflect the revised Pro Forma 24.
Consultation process
ASIC received five non-confidential submissions in response to its consultation on remaking this relief, under Consultation Paper 267 Remaking ASIC class orders and guidance on audit and financial reporting (CP 267). No objections were raised to our proposals to remake the instruments. We remade the instruments substantially in the form consulted on although some minor amendments have been made to reflect comments received in the submissions.
Our responses to key issues raised in the submissions are detailed in Report 497 Responses to submissions on CP 267 Remaking ASIC class orders on audit and financial reporting.
ASIC Corporations (Amendment and Repeal) Instrument 2016/914 repeals the previous instruments.