Corporations Act 2001

To make an order under section 340, 340A, 341 or 341A, ASIC must be satisfied that complying with the relevant requirements of Parts 2M.2, 2M.3 and 2M.4 would:

make the financial report, sustainability report or other reports misleading; or

be inappropriate in the circumstances; or

impose unreasonable burdens.

In deciding for the purposes of subsection (1) whether the audit requirements for a proprietary company, or a class of proprietary companies, would impose an unreasonable burden on the company or companies, ASIC is to have regard to:

the expected costs of complying with the audit requirements; and

the expected benefits of having the company or companies comply with the audit requirements; and

any practical difficulties that the company or companies face in complying effectively with the audit requirements (in particular, any difficulties that arise because a financial year is the first one for which the audit requirements apply or because the company or companies are likely to move frequently between the small and large proprietary company categories from one financial year to another); and

any unusual aspects of the operation of the company or companies during the financial year concerned; and

any other matters that ASIC considers relevant.

In assessing expected benefits under subsection (2), ASIC is to take account of:

the number of creditors and potential creditors; and

the position of creditors and potential creditors (in particular, their ability to independently obtain financial information about the company or companies); and

the nature and extent of the liabilities of the company or companies.