Auditor breach notifications and contravention reporting
Auditors are required to report to ASIC contraventions and suspected contraventions of the Corporations Act 2001 during the conduct of an audit.
Requirement to report to ASIC about significant contraventions of the Corporations Act under sections 311, 601HG and 990K.
Requirement to report to ASIC about conflict of interest situations.
Contraventions by a company, managed investment scheme and/or AFS licensee
Notifying ASIC about contraventions of the Corporations Act
For guidance on when you must report contraventions of the Corporations Act to us read Regulatory Guide 34 Auditors’ obligations: reporting to ASIC(RG 34).
An auditor of a company, registered scheme, disclosing entity or compliance plan has an obligation under s311 and 601HG of the Corporations Act to notify ASIC in writing if they encounter certain circumstances during the respective audits. These circumstances include contraventions of the Corporations Act, attempts to unduly influence, coerce, manipulate or mislead a person involved in the conduct of an audit or otherwise interfere with the proper conduct of an audit. The notification to ASIC must be made as soon as practicable or in any case within 28 days.
An auditor of an AFS licensee has an obligation under s990K of the Corporations Act to notify ASIC in writing if they become aware of certain matters, contraventions or suspected contraventions of licence conditions and other obligations of the AFS licensee. The auditor must report to ASIC within 7 days of becoming aware of a matter, contravention or suspected contravention.
To assist auditors involved in conducting an audit of a company, registered scheme, disclosing entity or AFS licensee comply with their obligations under s311, 601HG and 990K, please refer to Regulatory Guide 34 Auditors' obligations: reporting to ASIC. The guide also includes examples of suspected contraventions, how an auditor may deal with them, lodgement of notices and privilege in the circumstances.
Notice of auditor conflict of interest
If an auditor becomes aware of a relevant relationship that leads to a conflict of interest situation as defined in the relevant sections in Division 3 of Part 2M.4 of the Corporations Act, the auditor must notify ASIC in writing if the circumstances remain in existence after 7 days.