Companies Act 2006

Chapter 1 Introductory

1209 Main purposes of Part

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

(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),

(c) a person appointed as auditor of an insurer that is a friendly society under section 72 of or Schedule 14 to the Friendly Societies Act 1992 (c. 40),

(d) a person appointed as auditor of an insurer that is an industrial and provident society under section 4 of the Friendly and Industrial and Provident Societies Act 1968 (c. 55) or under section 38 of the Industrial and Provident Societies Act (Northern Ireland) 1969 (c. 24 (N.I.)),

(e) a person appointed as auditor for the purposes of regulation 3 of the Insurance Accounts Directive (Lloyd’s Syndicate and Aggregate Accounts) Regulations 2004 (S.I. 2004/3219) or appointed to report on the “aggregate accounts” within the meaning of those Regulations,

(f) a person appointed as auditor of an insurer for the purposes of regulation 3 of the Insurance Accounts Directive (Miscellaneous Insurance Undertakings) Regulations 1993 (S.I. 1993/3245),

(g) a person appointed as auditor of a bank for the purposes of regulation 4 of the Bank Accounts Directive (Miscellaneous Banks) Regulations 1991 (S.I. 1991/2704), and

(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)

  is a credit institution within the meaning given by Article 4.1(a) of Directive 2006/48/EC of the European Parliament and of the Council relating to the taking up and pursuit of the business of credit institutions, and

  (b)

  is a company or a firm as defined in Article 48 of the Treaty establishing the European Community;

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

• “industrial and provident society” means—

  (a)

  a society registered under the Industrial and Provident Societies Act 1965 (c. 12) or a society deemed by virtue of section 4 of that Act to be so registered, or

  (b)

  a society registered under the Industrial and Provident Societies Act (Northern Ireland) 1969 or a society deemed by virtue of section 4 of that Act to be so registered;

• “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;

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

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

1211 Eligibility for appointment as a statutory auditor: overview

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).