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Financial Reporting Act 2013

External Reporting Board, standards, and provisions that apply to other enactments - Standard provisions relating to auditor qualifications and access to information - Auditor qualifications

36H: Offence relating to section 36F or 36G

You could also call this:

"Breaking company rules can lead to big fines for the company and its directors."

Illustration for Financial Reporting Act 2013

If you are part of a company that does not follow the rules in section 36F or 36G, you can get in trouble. You can be fined up to $150,000 if the company does not comply. The directors of the company can also be fined up to $50,000 if they do not make sure the company follows the rules.

If a director is accused of not following the rules, they can say it is not their fault if they can prove they did everything they could to make sure the company followed the rules. They can also say it is not their fault if they took all the reasonable steps they could to make the company comply. The director might not be in trouble if they could not have done anything to make the company follow the rules.

You can read more about these rules in section 36F and section 36G to understand what companies and their directors need to do.

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View the original legislation for this page at https://legislation.govt.nz/act/public/1986/0120/latest/link.aspx?id=DLM6521292.

Topics:
Business > Industry rulesMoney and consumer rights > Consumer protection
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36G: Recognised body corporate must not act if requirements no longer met, or

"Stop being an auditor if you don't meet the rules anymore"

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36I: Cancellation or suspension of recognition or approval, or

"When authorities cancel or suspend a group's or person's special status for not following rules"

Part 2External Reporting Board, standards, and provisions that apply to other enactments
Standard provisions relating to auditor qualifications and access to information: Auditor qualifications

36HOffence relating to section 36F or 36G

  1. If a body corporate (A) fails to comply with section 36F or 36G,—

  2. A commits an offence and is liable on conviction to a fine not exceeding $150,000; and
    1. every director of A also commits an offence and is liable on conviction to a fine not exceeding $50,000.

      1. It is a defence to a director charged with an offence in relation to the duty imposed under section 36F or 36G if the director proves that—

      2. A took all reasonable and proper steps to ensure that the duty would be complied with; or
        1. he or she took all reasonable steps to ensure that A complied with the duty; or
          1. in the circumstances, he or she could not reasonably have been expected to take steps to ensure that A complied with the duty.

            Notes
            • Section 36H: inserted, on , by section 8 of the Financial Reporting Amendment Act 2014 (2014 No 64).