Where there was no indemnity or insurance of auditor, this note is not mandatory but its inclusion should be considered.

 

Where the company paid an insurance premium and the policy prohibits disclosure, state:

During the financial year, the company paid a premium in respect of a contract to insure the auditor of the company against a liability to the extent permitted by the Corporations Act 2001. The contract of insurance prohibits disclosure of the nature of liability and the amount of the premium.

 

Where a related entity paid an insurance premium and the policy prohibits disclosure, state:

During the financial year, a related entity paid a premium in respect of a contract to insure the auditor of the company against a liability to the extent permitted by the Corporations Act 2001. The contract of insurance prohibits disclosure of the nature of liability and the amount of the premium.

 

Where the company paid an insurance premium and the policy does not prohibit disclosure, consider the following options:

 

Option 1:

During the financial year, the company paid a premium of $XX,XXX in respect of a contract to insure the auditor of the company against a liability for costs that may be incurred in defending civil or criminal proceedings that may be brought against the auditor, in their capacity as auditor, except where there is a lack of good faith.

 

Option 2:

To the extent permitted by law, the company has agreed to indemnify its auditors as part of the terms of its audit engagement agreement against claims by third parties arising from the audit (for an unspecified amount). No payment has been made to indemnify the auditor during or since the financial year.

 

Option 3:

The company has agreed to indemnify its auditors to the extent permitted by law, against any claim by a third party arising from the company’s breach of their agreement. The indemnity stipulates that the company will meet the full amount of any such liabilities including a reasonable amount of legal costs.