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CORPORATIONS ACT 2001

CHAPTER 5C - MANAGED INVESTMENT SCHEMES  

PART 5C.4 - THE COMPLIANCE PLAN  

SECTION 601HG  AUDIT OF COMPLIANCE PLAN  

601HG(1)  

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The responsible entity of a registered scheme must ensure that at all times a registered company auditor, an audit firm or an authorised audit company is engaged to audit compliance with the scheme's compliance plan in accordance with this section. This auditor, firm or company is referred to as the auditor of the compliance plan.

601HG(2)  

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A person is not eligible to act as the individual auditor, lead auditor or review auditor of the compliance plan if the person is:


(a) an associate of the responsible entity; or


(b) an agent holding scheme property on behalf of the responsible entity or an associate of an agent of that kind; or


(c) the auditor of the responsible entity's financial statements.

601HG(2A)  

However:


(a) the auditor of the compliance plan and the auditor of the responsible entity's financial statements may work for the same firm of auditors or audit company; and


(b) the lead auditor or review auditor of the compliance plan (on the one hand) and the lead auditor or review auditor of the responsible entity's financial statements (on the other hand) may work for the same firm of auditors or audit company.

601HG(3)  

Within 3 months after the end of a financial year of the scheme, the auditor of the compliance plan must:


(a) examine the scheme's compliance plan; and


(b) carry out:


(i) if the scheme has only had one responsible entity during the financial year - an audit of the responsible entity's compliance with the compliance plan during the financial year; or

(ii) if the scheme has had more than one responsible entity during the financial year - an audit of each responsible entity's compliance with the compliance plan during that part of the financial year when it was the scheme's responsible entity; and


(c) give to the scheme's current responsible entity a report that states whether, in the auditor's opinion:


(i) the responsible entity, or each responsible entity, complied with the scheme's compliance plan during the financial year or that part of the financial year when it was the scheme's responsible entity; and

(ii) the plan continues to meet the requirements of this Part.

601HG(4)  Contravention by individual auditor.  

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An individual auditor conducting an audit of a compliance plan contravenes this subsection if:


(a) the auditor is aware of circumstances that:


(i) the auditor has reasonable grounds to suspect amount to a contravention of this Act; or

(ii) amount to an attempt, in relation to the audit, by any person to unduly influence, coerce, manipulate or mislead a person involved in the conduct of the audit (see subsection (12)); or

(iii) amount to an attempt, by any person, to otherwise interfere with the proper conduct of the audit; and


(b) if subparagraph (a)(i) applies:


(i) the contravention is a significant one; or

(ii) the contravention is not a significant one and the auditor believes that the contravention has not been or will not be adequately dealt with by commenting on it in the auditor's report or bringing it to the attention of the directors; and


(c) the auditor does not notify ASIC in writing of those circumstances as soon as practicable, and in any case within 28 days, after the auditor becomes aware of those circumstances.

601HG(4A)  Contravention by audit company.  

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An audit company conducting an audit of a compliance plan contravenes this subsection if:


(a) the lead auditor for the audit is aware of circumstances that:


(i) the lead auditor has reasonable grounds to suspect amount to a contravention of this Act; or

(ii) amount to an attempt, in relation to the audit, by any person to unduly influence, coerce, manipulate or mislead a person involved in the conduct of the audit (see subsection (12)); or

(iii) amount to an attempt, by any person, to otherwise interfere with the proper conduct of the audit; and


(b) if subparagraph (a)(i) applies:


(i) the contravention is a significant one; or

(ii) the contravention is not a significant one and the lead auditor believes that the contravention has not been or will not be adequately dealt with by commenting on it in the auditor's report or bringing it to the attention of the directors; and


(c) the lead auditor does not notify ASIC in writing of those circumstances as soon as practicable, and in any case within 28 days, after the lead auditor becomes aware of those circumstances.

601HG(4B)  Contravention by lead auditor.  

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A person contravenes this subsection if:


(a) the person is the lead auditor for an audit of a compliance plan; and


(b) the person is aware of circumstances that:


(i) the person has reasonable grounds to suspect amount to a contravention of this Act; or

(ii) amount to an attempt, in relation to the audit, by any person to unduly influence, coerce, manipulate or mislead a person involved in the conduct of the audit (see subsection (12)); or

(iii) amount to an attempt, by any person, to otherwise interfere with the proper conduct of the audit; and


(c) if subparagraph (b)(i) applies:


(i) the contravention is a significant one; or

(ii) the contravention is not a significant one and the person believes that the contravention has not been or will not be adequately dealt with by commenting on it in the auditor's report or bringing it to the attention of the directors; and


(d) the person does not notify ASIC in writing of those circumstances as soon as practicable, and in any case within 28 days, after the person becomes aware of those circumstances.

601HG(5)  

The auditor of the compliance plan:


(a) has a right of access at all reasonable times to the books of the scheme; and


(b) may require an officer of the responsible entity to give the auditor information and explanations for the purposes of the audit.

601HG(6)  

An officer of the responsible entity must:


(a) allow the auditor of the compliance plan to have access to the books of the scheme; and


(b) give the auditor information or an explanation required under subsection (5); and


(c) otherwise assist the conduct of the audit.

601HG(7)  

The responsible entity must lodge the auditor's report under subsection (3) with ASIC at the same time as the financial statements and reports in respect of the scheme are to be lodged with ASIC (see sections 292 and 321).

601HG(7A)  

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An offence based on subsection (1), (3), (6) or (7) is an offence of strict liability.

Note: For strict liability, see section 6.1 of the Criminal Code.

601HG(8)  

The auditor of the compliance plan has qualified privilege in respect of:


(a) a statement made in a report under subsection (3); or


(b) a notification to ASIC under subsection (4).

601HG(9)  

This section does not prevent the responsible entity from arranging for the auditor of the compliance plan to carry out audits in addition to those required by this section.

601HG(10)  Significant contraventions.  

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In determining for the purposes of this section whether a contravention of this Act is a significant one, have regard to:


(a) the level of penalty provided for in relation to the contravention; and


(b) the effect that the contravention has, or may have, on:


(i) the overall financial position of the company, registered scheme or disclosing entity; or

(ii) the adequacy of the information available about the overall financial position of the company, registered scheme or disclosing entity; and


(c) any other relevant matter.

601HG(11)  

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Without limiting paragraph (10)(a), a penalty provided for in relation to a contravention of a provision of Part 2M.2 or 2M.3, or section 324DAA, 324DAB or 324DAC, includes a penalty imposed on a director, because of the operation of section 344, for failing to take reasonable steps to comply with, or to secure compliance with, that provision.

601HG(12)  Person involved in audit.  

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In this section:

person involved in the conduct of an audit means:


(a) the auditor; or


(b) the lead auditor for the audit; or


(c) the review auditor for the audit; or


(d) a professional member of the audit team for the audit; or


(e) any other person involved in the conduct of the audit.


 



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