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Companies Act 1993

Accounting records and financial reporting - Financial reporting - Provisions relating to opting out and opting in

207J: Large companies may opt out of audit requirement

You could also call this:

“Large companies can choose to skip financial audits if shareholders agree”

If you run a large company, you might be able to choose not to have your financial statements audited. This is called “opting out”. You can’t do this if your company’s constitution says you can’t, if your company is a public entity, or if you have to register your financial statements under section 207E.

To opt out, you need to have a meeting with your shareholders. This meeting must happen within a certain time period. At the meeting, you need to have a vote. If at least 95% of the shareholders who can vote agree, then you can opt out of the audit requirement in section 207 for that accounting period.

If your shareholders vote to opt out, then section 207 won’t apply to your company for that accounting period. This means you won’t need to have your financial statements audited for that time.

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View the original legislation for this page at https://legislation.govt.nz/act/public/1986/0120/latest/link.aspx?id=DLM6041584.

Topics:
Business > Industry rules
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207I: Companies with 10 or more shareholders may opt out, or

“Companies with 10 or more shareholders can choose to skip some financial rules”

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207K: Companies with fewer than 10 shareholders may opt in, or

“Small companies can choose to follow special financial reporting rules”

Part 11 Accounting records and financial reporting
Financial reporting: Provisions relating to opting out and opting in

207JLarge companies may opt out of audit requirement

  1. This section applies to a large company.

  2. However, this section does not apply if—

  3. the constitution of the company expressly provides that this section does not apply; or
    1. the company is a public entity; or
      1. the company is required to register financial statements under section 207E.

        1. The shareholders of the company may, at a meeting of shareholders held within the opting period, opt out of compliance with section 207 in relation to the accounting period by way of a resolution approved by not less than 95% of the votes of those shareholders entitled to vote and voting on the question.

        2. If the shareholders opt out of compliance with section 207 in relation to an accounting period under this section, that section does not apply to the company in relation to that period.

        Notes
        • Section 207J: inserted, on , by section 30 of the Financial Reporting (Amendments to Other Enactments) Act 2013 (2013 No 102).