Under s324DA of the Corporations Act, the auditor of a listed company or listed registered managed investment scheme is not eligible to play a significant role in the audit of the company or scheme after 5 successive financial years.
ASIC have now issued a Policy Proposal Paper on relief from that requirement.
The Paper usefully gives an overview of the rotation requirements. Schedule 1 provides an overview of the audit market and Schedule 2 gives some examples of how the rotation requirements might apply in practice.
ASIC’s view is that can only grant relief if it is satisfied that compliance with the rotation requirements will impose an unreasonable burden on either:
(a) the audit client; or
(b) the auditor .
It may be more likely to grant relief if an applicant can identify a burden on both the auditor and the audit client.