- Auditor resignation fees were not included in the consultation on the ASIC industry funding model. In July 2018, the fee increased from $39 to $3,487
- CA ANZ and other stakeholders advocated subsequently for no fee or a lower fee to be charged
- In January 2019, Treasury issued an exposure draft on a number of measures including reducing this fee back to $40
It is well known now that ASIC has moved to an industry funding model. From 1 July 2017, all ASIC regulated entities have to cover a portion of ASIC’s costs. The first invoices have been issued for the 2017/18 financial year.
But these mainly relate to the new levies, and there are both levies and fees. Fees are charged for economic activity – "fees-for-services" – while levies are to cover regulatory activities that cannot be allocated. Regulatory activities that can be allocated where ASIC charges fees for service are:
- Licensing and registration
- Compliance reviews of documents
- Requests for changes to market operating rules, and
- Assessing applications for relief.
According to ASIC, part of the policy basis for such levies and fees is to ensure that:
- Costs of regulatory activities are borne by those creating the need for regulation
- Price signals are established in the way resources are allocated
- Economic incentives are provided to drive the government's desired regulatory outcomes
- Greater stability and certainty, and
- Cost transparency and accountability.
Application to resign
Though the charging of fees is not new practice, the list of chargeable activities under Schedule 1 of the Corporations (Fees) Regulations 2001 has grown, and so did some of the fees.
One such fee is for an application for consent from ASIC to resign as an auditor of a public company, including a company limited by guarantee, which increased from $39 to an astounding $3,487.
Auditors are required by section 329(5) of the Corporations Act 2001 to apply to ASIC for consent to resign as an auditor, so this fee has understandably prompted concerns from our members. For some members, particularly in smaller practices or in a succession scenario, the fees could quickly add up to a substantial amount.
Many believe the application to resign as an auditor is a mere formality. Per ASIC's Form 342 and Regulatory Guide (RG) 26 Resignation, removal and replacement of auditors, the auditor must provide a declaration to ASIC and some information, which appears to be information in relation to ASIC's regulation of the audited entity. For example, ASIC needs to be satisfied that there are no outstanding section 311 notifications (which the auditor must submit anyway whether resigning or not). Therefore, members have questioned the resources allocated to justify this fee.
What we did
We have engaged with both ASIC and Treasury on this matter. Our view expressed was that this fee should be waived by amending the Regulations. In the mean time we suggested that ASIC do not impose the fee (if it has such discretion), and auditors who have already been charged are given a refund.
Our letter to Treasury
Treasury has responded by issuing an exposure draft to amend the regulations, which includes reducing the fee payable for an application for consent from ASIC to resign as an auditor of a public company, including companies limited by guarantee. Treasury are currently consulting on a number of measures which include reducing this fee back to $40. We are supportive of this, but also request for those auditors who have paid the higher fee, to be refunded the difference.Download PDF
Treasurys latest consultation
Treasury’s latest consultation to reduce the fee back to $40Read more
CA ANZ submission on the Introduction of ASIC Fees-for-service under the industry funding modelDownload here