Building Societies Act 1986

[F1 5A (1) The terms of appointment of an auditor or auditors are subject to the requirement that the auditor or auditors cease to hold office at the conclusion of the annual general meeting in respect of the first complete financial year that follows the expiry of the maximum engagement period. U.K.

(2) In this paragraph—

• “the maximum engagement period” means, subject to sub-paragraph (3) and paragraph 5B (which makes transitional provision in relation to auditors appointed before 17th June 2016), whichever of the following periods is longest—

  (a)

  the period of ten years beginning with the first day of the first financial year in respect of which the auditor was appointed,

  (b)

  the period of twenty years beginning with the first day of the first financial year in respect of which the auditor was appointed, if the selection requirements are satisfied for at least one financial year which begins every ten years in that period, or

  (c)

  such other period of no more than twenty years beginning with the first day of the first financial year in respect of which the auditor was appointed and ending on the last day of the relevant ten year period;

• “the relevant ten year period” means the period of ten years beginning with the first day of the last financial year—

  (a)

  which begins within ten years of the first day of the first financial year in respect of which the auditor was appointed, and

  (b)

  in respect of which the auditor was reappointed following the carrying out of a selection procedure in accordance with the selection requirements; and

• “the selection requirements” means—

  (a)

  the requirements of paragraph 3B(3) and (4) if the building society has an audit committee, or

  (b)

  the requirements of paragraph 3C(3) if the building society does not have an audit committee.

(3) The maximum engagement period may be extended by a period of up to two years with the approval of the competent authority, provided that—

(a) in a case where the period within paragraph (a) of the definition of “the maximum engagement period” is being extended, the appointment of the auditor for the first complete financial year following the end of that period is made following the carrying out of a selection procedure in accordance with the selection requirements; and

(b) in all cases, the competent authority is satisfied that exceptional circumstances exist.

(4) An auditor is ineligible for appointment as auditor if—

(a) within the four years preceding the start of the financial year to which that appointment relates the auditor has ceased by virtue of sub-paragraph (1) to hold office as auditor of that building society, or

(b) the auditor is a member of the same network as an auditor who within the four years preceding the start of the financial year to which that appointment relates has ceased by virtue of that sub-paragraph to hold office as auditor of that building society.

(5) In this paragraph, “network” means an association of persons other than a firm co-operating in audit work by way of—

(a) profit-sharing;

(b) cost-sharing;

(c) common ownership, control or management;

(d) common quality control policies and procedures;

(e) common business strategy; or

(f) use of a common name.]

Textual Amendments

F1 Sch. 11 paras. 5A, 5B and heading inserted (17.6.2016) by The Statutory Auditors and Third Country Auditors Regulations 2016 (S.I. 2016/649), reg. 1(1)(a), Sch. 4 para. 8(b) (with reg. 1(6))