CBS shall as soon as practicable notify the auditor and the co-operative of its decision [329(6)].
Where CBS consents to the resignation, the auditor may, by notice in writing, given to the co-operative, resign as auditor of the co-operative. The resignation takes effect on the day (if any) specified in the resignation, the day CBS gives consent, or on the day (if any) fixed by CBS whichever is the latest [s329(5) and (8)].
Within 14 days after receiving the notice of resignation from the auditor (not the notice of application to CBS), the co-operative shall lodge notice of the resignation with CBS (Form 24), and give a copy of the notice to the trustee for debenture holders (if any) [s329(11)].
In considering an application for consent to resign, CBS's main concern is to ensure that the independence of the audit function is preserved. CBS will not consent to an application unless it is satisfied, among other things, that:
- the auditor has not been induced to resign because of any suggestions made by, or actions of, the co-operative's management, indicating that the auditor will be replaced if the auditor deals with certain matters or items other than in accordance with a manner suggested by the co-operative;
- adequate assurance has been given by the auditor that the application does not follow as a consequence of a limitation on the scope of the auditors work or the existence of a significant uncertainty affecting the financial statements; and
- the auditor provides any other assurances and information on any other matters which the auditor believes CBS should be made aware of, which may impinge on the independence of the audit function as it relates to the co-operative.
In completing the application form (Form 25) the auditor(s) should:
- provide full and appropriate replies to all questions.
- complete a separate application form for each co-operative
The annexure (if any) to the application (form 25) should have regard to the following:-
- The qualifying or adverse comment(s) includes any matters or changes in accounting principles or practices affecting the financial statements, or any other reason, not including changes necessitated by new or amended legislation.
- The disputes that must be reported include disputes, conflicts or disagreements about matters of accounting principle or practice; any action on the part of management of the registered co-operative to suggest that the auditor should resign or that the auditor will be removed from office if the audit deals with certain matters or items otherwise than in accordance with the approach desired by the management; or any other matter of a similar nature affecting the independence of the audit or the audit role.
- CBS expects an auditor to be completely candid in setting out the reasons in support of their application for consent to resign. If the auditor needs to supply further information or details, which CBS should take into account, then full details should be provided under separate cover or arrangements made to discuss the issues in strict confidence with the CBS.
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