Companies Act 2006

Chapter 1 U.K. Introductory

1209 Main purposes of Part U.K.

The main purposes of this Part are—

(a) to secure that only persons who are properly supervised and appropriately qualified are appointed as statutory auditors, and

(b) to secure that audits by persons so appointed are carried out properly, with integrity and with a proper degree of independence.

1210 Meaning of “statutory auditor” etc U.K.

(1) In this Part “statutory auditor” means—

(a) a person appointed as auditor under Part 16 of this Act,

(b) a person appointed as auditor under section 77 of or Schedule 11 to the Building Societies Act 1986 (c. 53),

[F1 (c) a person appointed as auditor of a friendly society under section 72 of or Schedule 14 to the Friendly Societies Act 1992, where that society is—

(i) an insurer, or

(ii) an issuer whose transferable securities are admitted to trading on a regulated market;]

(d) F2 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

[F3 (e) a person appointed as auditor for the purposes of regulation 5 of the Insurance Accounts Directive (Lloyd's Syndicate and Aggregate Accounts) Regulations 2008 or appointed to report on the “aggregate accounts” within the meaning of those Regulations,]

[F4 (f) a person appointed as auditor of an insurance undertaking for the purposes of the Insurance Accounts Directive (Miscellaneous Insurance Undertakings) Regulations 2008,]

[F5 (g) a person appointed as auditor of a bank for the purposes of the Bank Accounts Directive (Miscellaneous Banks) Regulations 2008,]

(h) a person appointed as auditor of a prescribed person under a prescribed enactment authorising or requiring the appointment;

and the expressions “statutory audit” and “statutory audit work” are to be construed accordingly.

(2) In this Part “audited person” means the person in respect of whom a statutory audit is conducted.

(3) In subsection (1)—

• “bank” means a person who—

  (a)

  [F6 is a credit institution within the meaning of Article 4(1)(1) of Regulation ( EU ) No. 575/2013 of the European Parliament and of the Council, and ]

  (b)

  is a company or a firm as defined in [F7 Article 54 of the Treaty on the Functioning of the European Union];

• “friendly society” means a friendly society within the meaning of the Friendly Societies Act 1992 (c. 40);

• F8 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

• “insurer” means a person who is an insurance undertaking within the meaning given by Article 2.1 of Council Directive 1991/674/EEC on the annual accounts and consolidated accounts of insurance undertakings;

• [F9 “issuer” has the same meaning as in Part 6 of the Financial Services and Markets Act 2000 (see section 102A(6));]

• “prescribed” means prescribed, or of a description prescribed, by order made by the Secretary of State for the purposes of subsection (1)(h).

• [F9 “regulated market” has the same meaning as in Part 6 of the Financial Services and Markets Act 2000 (see section 103(1)).]

(4) An order under this section is subject to negative resolution procedure.

Textual Amendments

F1 S. 1210(1)(c) substituted (with effect in accordance with reg. 1(5) of the amending S.I.) by The Statutory Auditors and Third Country Auditors Regulations 2017 (S.I. 2017/516), regs. 1(2), 13(2)(a)

F2 S. 1210(1)(d) omitted (6.4.2008) by virtue of The Insurance Accounts Directive (Miscellaneous Insurance Undertakings) Regulations 2008 (S.I. 2008/565), reg. 15(1)(b)(i)

F3 S. 1210(1)(e) substituted (15.8.2008) by The Insurance Accounts Directive (Lloyd's Syndicate and Aggregate Accounts) Regulations 2008 (S.I. 2008/1950), reg. 31(1) (with reg. 31(2))

F4 S. 1210(1)(f) substituted (6.4.2008) by The Insurance Accounts Directive (Miscellaneous Insurance Undertakings) Regulations 2008 (S.I. 2008/565), reg. 15(1)(a)

F5 S. 1210(1)(g) substituted (6.4.2008) by The Bank Accounts Directive (Miscellaneous Banks) Regulations 2008 (S.I. 2008/567), reg. 14

F6 Words in s. 1210(3) substituted (1.1.2014) by The Capital Requirements Regulations 2013 (S.I. 2013/3115), reg. 1(2), Sch. 2 para. 42(3) (with reg. 44)

F7 S. 1210(3): words in definition of "bank" substituted (1.8.2012) by The Treaty of Lisbon (Changes in Terminology or Numbering) Order 2012, art. 3(1), {Sch. Pt. 1} (with art. 2(2))

F8 S. 1210(3): defininition of "industrial and provident society" omitted (6.4.2008) by virtue of The Insurance Accounts Directive (Miscellaneous Insurance Undertakings) Regulations 2008 (S.I. 2008/565), reg. 15(1)(b)(ii)

F9 Words in s. 1210(3) inserted (with effect in accordance with reg. 1(5) of the amending S.I.) by The Statutory Auditors and Third Country Auditors Regulations 2017 (S.I. 2017/516), regs. 1(2), 13(2)(b)

Modifications etc. (not altering text)

C1 S. 1210(1)(a) modified (8.12.2017) by The Risk Transformation Regulations 2017 (S.I. 2017/1212), regs. 1(2), 165 (with reg. 189)

Commencement Information

I1 S. 1210 wholly in force at 6.4.2008; s. 1210 not in force at Royal Assent, see s. 1300; s. 1210 in force for specified purposes at 20.1.2007 by S.I. 2006/3428, art. 3(3) (subject to art. 5, Sch. 1 and with arts. 6, 8, Sch. 5); s. 1210 in force at 6.4.2008 by S.I. 2007/3495, art. 3(1)(u) (with savings in arts. 7, 12, Sch. 4 paras. 37-42)

1211 Eligibility for appointment as a statutory auditor: overview U.K.

A person is eligible for appointment as a statutory auditor only if the person is so eligible—

(a) by virtue of Chapter 2 (individuals and firms), or

(b) by virtue of Chapter 3 (Comptroller and Auditor General, etc).