Date posted: 17/01/2022

Recognition of NZ audit firms

NZ audit firms can now be appointed as auditors of Corps Act entities.

The Treasury Laws Amendment (2021 Measures No. 5) Bill 2021 received the Royal Assent on 7 December 2021. It amends subsection 324BB(5) of the Corporations Act 2001 to enable New Zealand audit firms to be appointed as auditors of Corporations Act entities from 8 December 2021 if at least one Registered Company Auditor (RCA) of the audit firm is ordinarily resident in Australia or New Zealand.

The Corporations Act 2001 allows individual RCAs, audit firms and Authorised Audit Companies (AAC) to be appointed as company auditors. However, previously, for an audit firm to be appointed as an Australian company auditor at least one RCA of the audit firm had to be ordinarily resident in Australia. This restricted New Zealand audit firms, ostensibly based on residency, from being appointed as company auditors in Australia. Whilst New Zealand based individuals are eligible to apply to be an RCA, and individuals can be appointed as company auditors, in New Zealand it is common practice for the audit firm to be appointed.

We first raised this with Treasury in late 2016 when the issue was first bought to our attention. We also consulted with, and received support from, ASIC and the FRC. We have been advocating for some time for trans-Tasman harmonisation to enable auditors to operate seamlessly between Australia and New Zealand. This addresses one of the final remaining hurdles.

Legislative amendments

Treasury Laws Amendment (2021 Measures No. 5) Bill 2021.

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Our submission

Miscellaneous amendments to Treasury portfolio laws 2021.

Read our submission