Resignation of an auditor of a public company
It explains:
- When we will consent to an auditor’s resignation
- How and when to lodge an application
- The procedure after you have applied for consent
- Why applications are not assessed
- When applications are not required
- Crowd-sourced funding (CSF) companies
Directors and audit committees of public companies play an important role in ensuring auditor independence, audit quality and the rights of members to decide on the appointment of an incoming auditor at an annual general meeting.
Detailed guidance on how we apply the provisions of the Corporations Act relating to the resignation of public company auditors is in Regulatory Guide 26 Resignation, removal and replacement of auditors (RG 26), particularly RG 26.57–RG 26.80.
Auditors of public companies limited by guarantee that are registered with the Australian Charities and Not-for-profit Commission (ACNC) must apply for ASIC’s consent to resign.
When we will consent to an auditor’s resignation
In general, we will consent to your resignation as an auditor of a public company 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 26.61 and RG 26.65).
However, we will generally not consent to your resignation as an auditor at any time of the year if:
- concerns are raised by the outgoing auditor about a disagreement with the management or directors of the public company (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 may be connected with ‘opinion shopping’ (see RG 26.22–RG 26.25).
We will decide whether to consent to a resignation on the merits of each application.
Effective date of resignation consent
If we consent to the resignation of an auditor of a public company, the resignation will take effect on the later of (see RG 26.67):
- the day of our consent
- the day (if any) specified in the notice of resignation given by the auditor to the company, or
- a day that we specify (if any).
Resignation disclosure
If we consent to the resignation of an auditor of a public company that is a disclosing entity, then, depending on the circumstances, the public company may be required to lodge a continuous disclosure notice with ASIC or the relevant market operator containing:
- details of the outgoing auditor
- details of the proposed incoming auditor, and
- the reason for the change in auditor (see RG 26.68).
If we consent to the resignation of an auditor of a public company that is not a disclosing entity, or that is a disclosing entity that does not need to lodge a continuous disclosure notice, ASIC considers it best practice to disclose the above auditor details, at or around the date when the resignation takes effect, by public notice displayed prominently on the company’s website where the notice can reasonably be readily located and accessed by members (see RG 26.69).
How and when to lodge an application
An application for consent to resign as an auditor of a public company can be submitted through the ASIC Regulatory Portal at any time of the year, subject to the requirements in RG 26. The auditor continues to hold office until consent has been granted. For this reason, auditor arrangements should not be changed before our consent is received.
We do not have the power to allow a resignation to take effect before the date on which we give consent, nor can we backdate our consent. You should lodge your application within a reasonable time so we can give due consideration to the information provided and arrive at a decision.
Generally, a reasonable time is at least four weeks before the intended date of change.
The procedure after you have applied for consent
When an auditor applies to ASIC for consent to resign, the auditor must advise the company in writing that an application seeking ASIC’s consent to resign is being made: see section 329(5).
After a decision has been reached, we will advise both the auditor and the company in writing.
If we grant consent to the resignation, the auditor must give written notice of the resignation to the company. This notice cannot be given to the company until after our consent has been received.
The company must lodge Form 315 Notification of resignation, removal or cessation of auditor within 14 days after receiving the notice of resignation from the auditor: see section 329(11).
Why applications are not assessed
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.
When applications are not required
Our consent to resign as auditor of a public company is not required in the following circumstances, if the auditor:
- is no longer a registered company auditor
- is not a registered company auditor at the date of appointment
- ceases to hold office when the company was in the process of being wound up voluntarily or by court order
- was appointed by the company’s directors on registration of the company and only holds office until the first Annual General Meeting (AGM) of the company, at which the members will either ratify the appointment or appoint a different auditor
- was appointed by the company’s directors to fill a casual vacancy and only hold office until the first AGM of the company following the appointment, at which the members will either ratify the appointment or appoint a different auditor
- was appointed to fill a vacancy following removal of a former auditor and only hold office until the first AGM of the company following the appointment, at which time, the members will either ratify the appointment or appoint a different auditor, or
- if the auditor must retire at the company’s next AGM after the company begins to be controlled by a corporation.
You also do not need our consent to resign if you are an auditor of a proprietary company unless the company holds an Australian financial services licence. Where the company holds an Australian financial services licence, you need to lodge a Form FS08 Application for consent from ASIC to resign as an auditor of an Australian financial services licensee.
Crowd-sourced funding (CSF) companies
For reporting, audit and governance requirements that apply to public companies and proprietary companies making CSF offers, please refer to Regulatory Guide 261 Crowd-sourced funding: Guide for companies (RG 261).
Where can I get more information?
For more information, see:
- RG 26 Resignation, removal and replacement of auditors.
- RG 261 Crowd-sourced funding: Guide for companies
- INFO 62 Removal of an auditor of a company
- Contact us.
Important notice
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.
This information sheet was reissued in October 2024.