According to a statement from the regulator, ASIC will now generally consent to the resignation of an auditor at any time of the year, subject to some conditions, where previously ASIC only consented to the resignation of an auditor of a public company taking place at an annual general meeting (AGM) unless there were exceptional circumstances.
ASIC said it will now 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”.
ASIC Commissioner John Price said the regulator’s changed approach would cut red tape and provide greater flexibility in the timing of changes of auditors.
The new approach is outlined in a revised Regulatory Guide 26 Resignation, removal and replacement of auditors, and is broadly consistent with the approach in major jurisdictions around the world.
The revised regulatory guide 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.