75Appointment of auditor by dealer

##### 75 Appointment of auditor by dealer (1) Within one month after a person becomes the holder of a dealers licence he shall appoint a person or persons, a firm or firms, or a person or persons and a firm or firms, as auditor or auditors to audit his accounts. (2) Subject to this section, a person shall not: (a) consent to be appointed as auditor of a dealer; (b) act as auditor of a dealer; or (c) prepare a report required by this Act to be prepared by an auditor of a dealer; if: (d) the person is not a registered company auditor; (e) the person, or a body corporate in which the person is a substantial shareholder for the purposes of Division 4 of Part IV of the Companies Act 1981 or the provisions of the law of a participating State or a participating Territory that correspond with that Division, is indebted in an amount exceeding $5,000 to the dealer or, if the dealer is a body corporate, to a related body corporate; or (f) the person is: (i) in the case of a dealer who is a natural person—a partner or employee of the dealer; or (ii) in the case of a dealer that is a body corporate: (A) an officer of the body corporate; (B) a partner, employer or employee of an officer of the body corporate; or (C) a partner or employee of an employee of an officer of the body corporate. (3) Subject to this section, a firm shall not: (a) consent to be appointed as auditor of a dealer; (b) act as auditor of a dealer; or (c) prepare a report required by this Act to be prepared by an auditor of a dealer; unless: (d) at least one member of the firm is a registered company auditor who is ordinarily resident in a State or Territory; (e) where the business name under which the firm is carrying on business is not registered under the Business Names Ordinance 1963—there has been lodged with the Commission a return in the prescribed form showing, in relation to each member of the firm, his full name and his address as at the time when the firm so consents, acts or prepares a report; (f) no member of the firm, and no body corporate in which any member of the firm is a substantial shareholder within the meaning of Division 4 of Part IV of the Companies Act 1981, or the provisions of the law of a participating State or of a participating Territory that correspond with that Division, is indebted in an amount exceeding $5,000 to the dealer or, where the dealer is a body corporate, to a related body corporate; (g) no member of the firm is: (i) in the case of a dealer who is a natural person—a partner or employee of the dealer; or (ii) in the case of a dealer that is a body corporate: (A) an officer of the body corporate; (B) a partner, employer or employee of an officer of the body corporate; or (C) a partner or employee of an employee of an officer of the body corporate; and (h) in the case of a dealer that is a body corporate, no officer of the body corporate receives any remuneration from the firm for acting as a consultant to it on accounting or auditing matters. (4) A reference in subsection (2) or (3) to indebtedness to a body corporate does not, in relation to indebtedness of a natural person, include a reference to indebtedness of that person to a body corporate that is a prescribed corporation for the purposes of Division 4 of Part VI of the Companies Act 1981 where: (a) the indebtedness arose as a result of a loan made to that person by the body corporate in the ordinary course of its ordinary business; and (b) the amount of that loan was used by that person to pay the whole or part of the purchase price of premises that are used by that person as his principal place of residence. (5) For the purposes of subsections (2) and (3), a person shall be deemed to be an officer of a body corporate if: (a) he is an officer of a related body corporate; or (b) except where the Commission, if it thinks fit in the circumstances of the case, directs that this paragraph shall not apply in relation to him—he has, at any time within the immediately preceding period of 12 months, been an officer or promoter of the body corporate or of a related body corporate. (6) For the purposes of this section, a person shall not be taken to be an officer of a body corporate by reason only of his being or having been the liquidator of that body corporate or of a related body corporate. (7) For the purposes of this section, a person shall not be taken to be an officer of a body corporate by reason only of his having been appointed as auditor of that body corporate or of a related body corporate or, for any purpose relating to taxation, a public officer of a body corporate or by reason only of his being or having been authorized to accept on behalf of the body corporate or a related body corporate service of process or any notices required to be served on the body corporate or related body corporate. (8) The appointment of a firm as auditor of a dealer shall be deemed to be an appointment of all persons who are members of the firm and are registered company auditors, whether resident in a State or Territory or not, at the date of the appointment. (9) Where a firm that has been appointed as auditor of a dealer is reconstituted by reason of the death, retirement or withdrawal of a member or members or by reason of the admission of a new member or new members, or both: (a) a person who was deemed under subsection (8) to be an auditor of the dealer and who has so retired or withdrawn from the firm as previously constituted shall be deemed to have resigned as auditor of the company as from the day of his retirement or withdrawal but, unless that person was the only member of the firm who was a registered company auditor and, after the retirement or withdrawal of that person, there is no member of the firm who is a registered company auditor, section 76 does not apply to that resignation; (b) a person who is a registered company auditor and who is so admitted to the firm shall be deemed to have been appointed as an auditor of the dealer as from the date of his admission; and (c) the reconstitution of the firm does not affect the appointment of the continuing members of the firm who are registered company auditors as auditors of the dealer; but nothing is this subsection affects the operation of subsection (3). (10) Except as provided by subsection (9), the appointment of the members of a firm as auditors of a dealer that is deemed by subsection (8) to have been made by reason of the appointment of the firm as auditor of the dealer is not affected by the dissolution of the firm. (11) A report or notice that purports to be made or given by a firm appointed as auditor of a dealer shall not be taken to be duly made or given unless it is signed in the firm name and in his own name by a member of the firm who is a registered company auditor. (12) Where a person or firm is appointed as an auditor under subsection (1) (not being an appointment that is deemed to be made by virtue of subsection (9)) or under subsection (16), the dealer shall within 14 days after the appointment lodge with the Commission a notice in writing stating that he has made the appointment and specifying the name of the person or firm. (13) Without limiting the generality of section 141, if, in contravention of this section, a firm consents to be appointed, or acts as, an auditor of a dealer or prepares a report required by this Act to be prepared by an auditor of a dealer, each member of the firm is guilty of an offence. (14) A person shall not: (a) if he has been appointed auditor of a dealer—knowingly disqualify himself while the appointment continues from acting as auditor of the dealer; or (b) if he is a member of a firm that has been appointed auditor of a dealer—knowingly disqualify the firm while the appointment continues from acting as auditor of the dealer. (15) An auditor of a dealer holds office until death, until removal or resignation from office in accordance with section 76 or until becoming prohibited from acting as auditor by reason of subsection (2) or (3). (16) Within 14 days after a vacancy occurs in the office of an auditor of a dealer, if there is no surviving or continuing auditor of the dealer, the dealer shall appoint a person or persons, a firm or firms or a person or persons and a firm or firms to fill the vacancy. (17) While a vacancy in the office of an auditor continues, the surviving or continuing auditor or auditors (if any) may act. (18) A dealer shall not appoint a person or firm as auditor of the dealer unless that person or firm has, before the appointment, consented by notice in writing given to the dealer to act as auditor and has not withdrawn his or its consent by notice in writing given to the dealer. (19) This section does not apply in relation to a body corporate (other than an exempt proprietary company) in relation to which section 280 of the Companies Act 1981 or the corresponding provision of a law of a participating State or of a participating Territory applies. (20) In subsection (19), exempt proprietary company means a body corporate that is an exempt proprietary company within the meaning of the Companies Act 1981 or the corresponding law of a participating State or of a participating Territory.