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Audit Qualifications and Registration: Q&As
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Registered company auditors 
as reported in ANT47/2007 
 
Q: I wish to apply to become a registered company auditor. Where can I find some more information on what's involved and some assistance in completing the documents? 
 
A: The auditor registration requirements contained in section 1280 of the Corporations Act were significantly amended with the passage of the CLERP 9 legislation in 2004. The changes eased the difficulties that many auditors, especially those in rural and regional areas, were having in meeting the experience requirements prescribed by the legislation. 
 
Auditors still have to meet the educational requirements prescribed, but now have a choice of either complying with the practical experience rules, or satisfying the components of an "audit competency standard" (see section 1280(2)).  
 
ASIC has recently updated its guidance on the application of section 1280 for individuals and companies seeking registration as a company auditor or an authorised audit company. To simplify the registration process for prospective auditors, they have now located all their guidance about registration in one document - Regulatory Guide 180 "Auditor Registration" (RG 180). This document replaces Policy Statement 180, last issued in 2004.  
 
The Institute website contains a copy of the approved competency standard referred to in section E of RG 180 (para RG180.77), as well as a logbook to assist members in complying with the standard. It also contains reference to an article summarising the main features of the competency requirements published in May 2005's Charter, as well as a series of frequently asked questions. 
 
 

 
Audit requirements for small clients 
as reported in ANT23/2007 
 
Q: What are the audit qualifications required for members of the Institute wishing to conduct audits of smaller clients like clubs, cooperatives, associations, real estate agents and legal practitioners trust accounts. 
 
A:The audit requirements for the audits of these types of entities depend on the requirements imposed by the legislation governing them. Some of this legislation is state based and therefore varies from state to state as well.  
 
Therefore it is first necessary to determine which legislation the client is covered by and what it specifies about the qualifications required of an auditor.  
 
The Institute library can assist with providing access to relevant pieces of legislation if required and a table setting out the main pieces of legislation that are relevant for these audits, including the section numbers which deal specifically with audit requirements and qualifications as appropriate is set out below  
 
Members should also check the entity's constitution, which can include requirements concerning whether an audit is required, and the qualifications of the auditor. 
 
Clubs incorporated as companies limited by guarantee, because of their public company status, require an audit by a ”registered company auditor” (RCA) in accordance with the Corporations Act. For the other types of entities, the qualification most often used in the law is that of an RCA. However membership of a relevant professional body such as the ICAA is also used in some circumstances, hence the need to be clear about the requirements of the legislation applying to the particular client.  
 
The requirements for obtaining RCA status under the Corporations Act are set out in section 1280 of the Act.  
 
The methods of obtaining this designation were expanded several years ago and “audit competency guidelines” prepared by the Institute and approved by ASIC can assist members who had difficulty qualifying under the rules. More details on these guidelines are available on our website.  
 
In addition to the above requirements a prospective auditor also needs to consider the various Institute regulations and ethical requirements. APES 410 'Conformity with Auditing and Assurance Standards' requires members to perform audits for both general and special purpose audit reports in accordance with auditing standards. Therefore a member should ensure that they have the necessary skills and up to date knowledge to comply with these requirements in relation to the particular client being considered.  
 
If there is no requirement that you be a registered company auditor, no fees are to be charged for your services and the services are not being provided to the public as a Chartered Accountant, Regulation 4, 702 does not require you to hold a Certificate of Public Practice. However, where a fee is to be charged and you are signing an audit opinion using the CA designation, you must apply for a Certificate of Public Practice. If you are earning less than $23,000 p.a. from relevant services, you can apply for a concessional Certificate of Public Practice at a rate of one third of the full annual rate. If you are earning less than $2,000 you can apply for a Certificate of Public Practice at a nil rate. It is a requirement of holding a Certificate of Public Practice is that a member must have Professional Indemnity insurance cover of a minimum of $500,000.  
 
While there is no requirement that professional indemnity insurance must be held without a Certificate of Public Practice, you should also consider the extent of your personal liability in relation to the services provided. If you consider that you would have some liability in relation to the engagement, a concessional professional indemnity insurance policy can be obtained if you hold a concessional Certificate of Public Practice. 
 
Members should also review the requirements of the Profession’s Code Of ethics APES 110 dealing with such issues as objectivity, integrity, professional competence, confidentiality, professional behaviour and independence. 
 
Table of Legislation Governing Audits and Audit Requirements 
 
 
 
 
Audit Competency Information 
as reported in ANT10/2006 
 
Q: I wish to apply to become a registered company auditor. How has the process changed and where can I find some assistance on completing the documents? 
 
A: The auditor registration requirements contained in section 1280 of the Corporations Act were significantly amended with the passage of the CLERP 9 legislation in 2004. The changes eased the difficulties that many auditors, especially in rural and regional areas were having meeting the experience requirements prescribed by the legislation. 
 
Auditors still have to meet the educational requirements prescribed but now have a choice of either complying with the practical experience rules or satisfying the components of an “audit competency standard” (see section 1280(2)).  
 
The ASIC approved competency standard is available on the ICAA website together with a logbook to assist members to comply with the standard. The website also includes an article summarising the main features of the new requirements published in May 2005’s Charter as well as a series of frequently asked questions.  
 
 
Auditor Considerations 
as reported in ANT 10/2005 
 
Q: A small charity wants me to be their auditor. What factors do I need to consider? 
 
A: The main factor that needs to be considered is what qualifications are required of the auditor by the entity's documents of incorporation or other source of the audit mandate. Corporations Act audits can only be performed by Registered Company Auditors, others may require a Member of the Institute while others may not specify qualifications. 
 
Notwithstanding the above, the Institute's ethical requirements, specifically APS 1.1 "Conformity with Auditing Standards" requires members to perform audits for both general and special purpose audit reports in accordance with auditing standards. Therefore Members should ensure they have the necessary skills and up to date knowledge to comply with these requirements in relation to the particular client being considered. 
 
Members should also be aware of the rules concerning practicing certificates and consider their need for and access to professional indemnity insurance before accepting the appointment.