If you hold an AFSL you have to have an auditor registered with ASIC. But the way you register the auditor could have large compliance ramifications down the track.
You can appoint either an individual or a firm of auditors. If you have a strong relationship with an individual auditor, you may want to appoint them so that they will continue to act for you even if they move to a different firm. However, if your relationship is with the firm, you should appoint the firm so that your business will stay there regardless of staff movements.
This is very important if you need or want to change your auditor. You need ASIC's consent to remove your registered auditor and before you can register a new auditor. This consent is unlikely to be granted unless you make the application for removal at the same time as your audit is lodged. ASIC's view is that the compliance component of the audit is a continual process over the whole year. If you apply to remove your auditor half-way through the audit year, ASIC's view is that the new auditor will only be auditing six months of your compliance activity.
We have seen several businesses caught where they misidentified the auditor (for example, registered a firm instead of the individual) and then were not able to rectify the error when it was identified. This can lead to doubling your audit costs or place you at risk of breaching your audit obligations under your AFSL.
Tip: check your auditor registration and ensure it fits your needs.
The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.