Resignation and removal of auditors of Australian financial services
This is Information Sheet 290(INFO 290). It is for auditors of Australian financial services (AFS) licensees who wish to resign from office. It is also for AFS licensees that wish to remove an auditor from office under the Corporations Act 2001 (Corporations Act).
Detailed guidance on how we apply the provisions of the Corporations Act relating to the resignation and removal of AFS licensee auditors is contained in Regulatory Guide 26 Resignation, removal and replacement of auditors (RG 26), particularly RG 26.99–RG 26.107.
An AFS licensee auditor who wishes to resign must apply to ASIC for our consent, using paper forms. An AFS licensee who wishes to remove an auditor from office, can apply to ASIC for our consent online, using the AFS licensees portal or paper forms.
How and when to lodge an application
Resignation of an AFS licensee auditor
Section 990G of the Corporations Act relates to the resignation of auditors for natural persons, partnerships, non-corporate trustees and proprietary companies that hold an Australian financial services (AFS) licence.
Where the AFS licensee is a public company, section 990G does not apply. Refer to Information Sheet 65 Resignation of an auditor of a public company (INFO 65) for details on the resignation of an auditor if the AFS licensee is a public company.
In addition to resigning as auditor of the AFS licensee, an auditor will also need to resign in accordance with section 329 if they were appointed to audit a proprietary company’s financial report under section 325. This applies even if these audits are conducted by the same person or firm.
Under section 329(9), the auditor of a proprietary company’s financial report can resign by simply giving the company notice of their resignation. The company is then required to lodge a Form 315Notification of resignation, removal or cessation of auditor within 14 days after receiving the notice of resignation from the auditor.
Removal of an AFS licensee auditor
Section 990F of the Corporations Act relates to the removal of auditors by the AFS licensee who may be natural persons, partnerships, non-corporate trustees and proprietary companies that hold an AFS licence.
Where the AFS licensee is a public company, section 990F does not apply. Refer to Information Sheet 62 Removal of an auditor of a company (INFO 62) for details on the removal of an auditor if the AFS licensee is a public company.
The auditor will also need to be removed in accordance with section 329 if the auditor was appointed to audit a proprietary company’s financial report under section 325. Refer to Information Sheet 62 Removal of an auditor of a company (INFO 62) for details.
How to lodge an AFS licensee auditor’s resignation or removal application
It is recommended that the application be lodged at least four weeks before the date of the resignation or removal is to take effect. For us to give proper consideration to an application from an AFS licensee auditor to resign, or for the AFS licensee to remove the auditor, follow these steps:
Complete either Form FS08Application for consent to resign as an auditor of an Australian financial services licenseeorForm FS07Application for consent from ASIC to remove an auditor of an Australian financial services licensee ensuring that it includes:
specific reasons why the auditor wishes to resign or why the AFS licensee wants to remove the auditor
details of the status of the audit (i.e. partially completed; not yet started), and
for an application to resign, the date when the resignation is to take effect.
Ensure that we have been notified of any contravention of the Act in accordance with section 990K.
Attach written confirmation from the proposed replacement auditor stating that the auditor:
is prepared to accept the appointment, subject to our consent to the resignation or removal being granted
has the ability to fulfil obligations they will have as auditor under relevant legislation and standards, and
can reasonably expect to conduct an effective audit before the reporting deadline if the change is close to the reporting deadline.
For an AFS licensee that is a proprietary company, attach a signed copy of a directors’ or members’ resolution appointing a replacement auditor to the licensee, subject to our consent to the resignation or removal being granted.
When we will consent to the auditor’s resignation or removal
In general, we will consent to the resignation or removal of an auditor of an AFS licensee to take effect at any time of the year if:
our criteria for consent are satisfied (see RG 26.21), and
all relevant supporting information is provided with the application (see RG 26.34–RG 26.37).
However, we will generally not consent to the resignation or removal of an auditor at any time of the year if:
concerns are raised by the outgoing auditor about a disagreement with management or directors of the AFS licensee (see RG 26.26–RG 26.31), and/or
other evidence indicates that we should not provide our consent, including the outgoing auditor being made aware that their resignation or removal may be connected with ‘opinion shopping’ (see RG 26.22–RG 26.25).
We do not have the power to allow a resignation or removal to take effect before the date on which we give consent, nor can we backdate our consent.
We will decide whether to consent to a resignation or removal on the merits of each application.
If we consent to the resignation of an AFS licensee auditor, the resignation will take effect on the later of:
the day (if any) specified in the notice of resignation given by the auditor to the AFS licensee, or
the day we give our consent; or
a day that we specify (if any) (see RG 26.105).
The removal of an AFS licensee auditor can only take effect on the day ASIC gives consent (see RG 26.106).
The procedure after you have applied for consent
When an application is made, do not assume that we will automatically grant consent. If we do not consent to the resignation, the auditor will continue to hold office as the AFS licensee’s auditor.
When an auditor applies to ASIC for consent to resign, the auditor must advise the AFS licensee in writing that an application is being made: see section 990G(1)(a).
Once a decision has been made, we will advise both the auditor and the AFS licensee in writing of the outcome of the application.
If we grant our consent, the auditor is then required to give written notice of the resignation to the AFS licensee. It is important to be aware that this notice cannot be given to the AFS licensee until after our consent has been received.
The Corporations Act does not require an AFS licensee to advise the auditor in writing that the removal application is being made. However, as best practice, we expect AFS licensees to do this and our decision to grant consent to a removal will take into consideration whether the auditor has been put on notice, or if reasonable attempts have been made to notify the auditor of the application.
If we grant our consent to the application, we will advise the AFS licensee in writing. The AFS licensee should then give written notice of our decision to the auditor, but only after the AFS licensee has received notification of our decision
When our consent is not required
In addition to resignation or removal, it is our view that an auditor appointed under section 990B automatically ceases to hold office if they become ineligible to act as the AFS licensee’s auditor: see section 990C and reg 7.8.16. In these circumstances, our consent is not required. The AFS licensee is required to lodge a Form FS09Notification of cessation of an auditor of an Australian financial services licensee if an AFS licensee auditor has died or become ineligible to act as AFS licensee auditor as soon as practicable.
Notification of auditor appointments
Once the position of auditor becomes vacant, a new auditor must be appointed within 14 days: see section 990B(2) and reg 7.8.15(8) of the Corporations Regulations 2001. The AFS licensee is then required to lodge a notice of appointment, using Form FS06Appointment of an Australian financial services licensee within 14 days of the appointment: see section 990B(6).
Why applications are returned
Our experience is that some auditors lodge applications that are either incomplete or based on one or more misconceptions about what the Corporations Act requires.
Applications that do not sufficiently address the matters referred to in RG 26, or that are incomplete or deficient, will not be assessed by us until all relevant information is provided. In this case, we will seek correction of the deficiencies and ask for further information to support the application. See the checklist of information to be provided with your application in the appendix to RG 26.
Where can I get more information?
For more information, see:
RG 26Resignation, removal and replacement of auditors
INFO 65Resignation of an auditor of a public company
Please note that this information sheet is a summary giving you basic information about a particular topic. It does not cover the whole of the relevant law regarding that topic, and it is not a substitute for professional advice. We encourage you to seek your own professional advice to find out how the applicable laws apply to you, as it is your responsibility to determine your obligations.
You should also note that because this information sheet avoids legal language wherever possible, it might include some generalisations about the application of the law. Some provisions of the law referred to have exceptions or important qualifications. In most cases your particular circumstances must be taken into account when determining how the law applies to you.
Information sheets provide concise guidance on a specific process or compliance issue or an overview of detailed guidance.
This information sheet was issued in October 2024.
