ASIC has released a new policy statement today which outlines its approach to applications for relief from auditor rotation requirements in the Corporations Act. ASIC has limited power to give relief from the auditor rotation requirements. Policy Statement 187 Auditor rotation [PS 187] sets out when ASIC will use its limited relief power. ‘In March 2006, ASIC issued a policy proposal paper (PPP) about auditor rotation. In developing our final policy, we’ve taken into consideration the submissions we received in response to this PPP, and recent applications for relief’, said ASIC’s executive director of regulation, Malcolm Rodgers. ‘Auditor rotation was introduced into the Corporations Act in 2004, with a two-year transition period and so we expect auditors to be well-placed to comply with these statutory requirements. However, we have identified a number of instances where auditors of publicly listed entities must rotate in the current year to meet the requirements of the act’, Mr Rodgers said. ‘Rotation is a key aspect of the independence provisions aimed at enhancing the reliability and credibility of financial reports and ASIC will be writing to selected auditors requesting their auditor rotation succession plans for listed companies and schemes in the near future.’
