Auditors and the audit report

Organisations and branches (reporting units) must use an auditor who has been registered under the RO Act.

See a list of registered auditors.

For information on how to become a registered auditor, see Registered auditors.

After the end of each financial year, the financial report of a reporting unit must be audited before they are:

• provided to members
• presented to a meeting
• lodged with the Commission.

In their report the auditor must state whether, in their opinion, the general purpose financial report (GPFR) is presented fairly in accordance with the following:

• the Australian Accounting Standards
• the General Manager's reporting guidelines
• any other requirements imposed by Part 3 of Chapter 8 of the RO Act.

If not of that opinion, they must say why and must, to the extent it is practicable, quantify the effect that non-compliance has on the GPFR.

See more information about the auditor's role in preparing the audit report and their powers and rights.

The RO Act limits the time that auditors can 'play a significant role' in the audit of a reporting unit’s financial reports (section 256A).

An individual must not play a significant role in the audit of a reporting unit for more than:

• 5 consecutive financial years or
• 5 out of 7 consecutive financial years.

Meaning of ‘play a significant role’

The RO Act defines this term when the position of auditor is held by:

• an individual or
• a firm or company.

If the auditor is an individual, that individual plays a significant role if they are the registered auditor for the reporting unit for the financial year.

If the auditor is a firm or company, an individual (who is a registered auditor acting on behalf of the firm or company) plays a significant role if they:

• participate in the preparation of an audit report in relation to the financial report of the reporting unit for the financial year, or part of it, or
• conduct an audit in relation to the reporting unit for the financial year or part of it.

A reporting unit may only remove an auditor during the term of their appointment by complying with section 263 of the RO Act. This helps to ensure members have access to an audit of the financial report that is transparent, accurate and free from coercion.

If you have appointed a registered auditor who is not able to complete your audit due to the rotation provisions, you must raise this with the auditor immediately. This is because that auditor is not permitted to continue or complete the audit. If they do, financial penalties might apply and other action might be required.

A range of options are available if this occurs. It might be as simple as the auditor resigning the appointment. Each case will be different. We recommend you contact us about the particular circumstances of your case by email at regorgs@fwc.gov.au.

The RO Act contains penalties concerning the auditor, their appointment and the audit of financial reports. The General Manager is able to pursue financial penalties if the provisions relating to the audit of financial reports are not complied with.