Auditor independence declaration timing relief

AUDITORS have been given some relief in relation to the needs of meeting timing obligations associated with financial reports.

For financial years and half-years that start on or after July 1 2004, the Corporations Act requires an auditor to give the auditor’s independence declaration to directors at the same time as the auditors report.

The class order released by the Australian Securities and Investments Commission allows an auditor’s report to be signed after the auditor’s independence declaration is given to directors, rather than requiring both documents to be signed at the same time.

Specifically, the class order gives relief where:

• The declaration is given to directors before the directors resolve to make the relevant directors’ report and no earlier than seven days before the directors’ report is signed; and

• The relevant auditor’s report is made within seven days after the directors’ report is signed and includes a statement or statements to the effect that either the declaration would be in the same terms if it was given to the directors at the time the auditor’s report is made or circumstances have changed since the declaration was given to the directors and setting out how the declaration would differ if it was given to the directors at the time the auditor’s report is made.