The Statutory Auditors (Amendment of Companies Act 2006 and Delegation of Functions etc) Order 2012

PART 3 U.K. Transfer of Functions of the Secretary of State

The Statutory Auditors (Delegation of Functions etc) Order 2008 U.K.

6.  The Statutory Auditors (Delegation of Functions etc) Order 2008 M1 is revoked.

Marginal Citations

M1 S.I. 2008/496, amended by S.I. 2010/2537.

Transfer of functions U.K.

7.—(1) The designated body is designated for the purpose of enabling it to exercise functions of the Secretary of State under Part 42 of the Act (statutory auditors).

(2) The functions of the Secretary of State under—

(a) section 1210(1)(h) of the Act (meaning of “statutory auditor” etc),

(b) section 1214(4) of the Act (power to specify connection between persons for purposes of independence requirement),

(c) section 1231(2)(a) (receipt of report by independent supervisor of auditors general),

(d) section 1231(3) of the Act (laying report by independent supervisor of auditors general before each House of Parliament),

(e) section 1237(3) of the Act (provision for pending proceedings in order revoking appointment of independent supervisor),

(f) section 1239(1)(b) of the Act (making regulations for register of third country auditors),

(g) section 1246 of the Act (regulations conferring power to remove third country auditors from the register of auditors),

(h) section 1261(3) of the Act (power to modify Part 42 of the Act (statutory auditors) for purposes of application to certain bodies), F1 ...

(i) section 1263 of the Act (power to amend enactments in consequence of changes affecting accountancy bodies),

[F2 (j) section 1240A(1) of the Act (power to approve third countries as equivalent or transitional third countries), and

(k) section 1240B(1) of the Act (power to approve third country competent authorities),]

are not transferred by this Order.

(3) The transfer of the functions of the Secretary of State under—

(a) section 1224 of the Act (power to call for information from recognised bodies etc),

(b) section 1239(8) of the Act (obligations relating to register enforceable by injunction etc),

(c) section 1244 of the Act (power to call for information from registered third country auditors),

(d) section 1253A of the Act M2 (requests to foreign competent authorities), and

(e) section 1254 M3 of the Act (directions to comply with international obligations),

is subject to the reservation that these functions remain exercisable concurrently by the Secretary of State.

(4) The transfer of the functions of the Secretary of State of—

(a) refusing to make a declaration under section 1221(1) of the Act M4 (approval of [F3 third country qualification]) on the grounds referred to in section 1221(4) (lack of comparable treatment),

(b) withdrawing such a declaration under section 1221(7) of the Act on those grounds,

(c) refusing to comply with a request under section 1253B(1) of the Act M5 (requests from [F4 approved third country competent authorities]) on the grounds referred to in section 1253B(3)(a) (prejudice to sovereignty, security or public order), and

(d) refusing a request, or directing a statutory auditor to refuse a request, from a third country competent authority in a case referred to in section 1253E(7)(a) of the Act M6 (prejudice to sovereignty, security or public order),

is subject to the reservation that these functions are exercisable only with the consent of the Secretary of State.

(5) The transfer of the function of the Secretary of State under section 1241(2)(c) of the Act M7 (order to exclude bodies corporate from definition of “[F5 UK-traded third country company]”) is subject to the reservations that this function remains exercisable concurrently by the Secretary of State and is exercisable by the designated body only with the consent of the Secretary of State.

[F6 (6) In this article—

(a) the reference in paragraph (1) to the functions of the Secretary of State under Part 42 of the Companies Act 2006 includes a reference to functions which have been amended by the Statutory Auditors and Third Country Auditors Regulations 2016 [F7 , the Statutory Auditors Regulations 2017 and the Statutory Auditors and Third Country Auditors (Amendment) (EU Exit) Regulations 2019]; and

(b) references to provisions of the Companies Act 2006 in paragraphs (2) to (5) include amendments made to those provisions by the Statutory Auditors and Third Country Auditors Regulations 2016 [F8 , the Statutory Auditors Regulations 2017 and the Statutory Auditors and Third Country Auditors (Amendment) (EU Exit) Regulations 2019].]

Textual Amendments

F1 Word in art. 7(2)(h) omitted (31.12.2020) by virtue of The Statutory Auditors and Third Country Auditors (Amendment) (EU Exit) Regulations 2019 (S.I. 2019/177), regs. 2, 57(a)(i); 2020 c. 1, Sch. 5 para. 1(1)

F2 Art. 7(2)(j)(k) inserted (31.12.2020) by The Statutory Auditors and Third Country Auditors (Amendment) (EU Exit) Regulations 2019 (S.I. 2019/177), regs. 2, 57(a)(ii); 2020 c. 1, Sch. 5 para. 1(1)

F3 Words in art. 7(4)(a) substituted (31.12.2020) by The Statutory Auditors and Third Country Auditors (Amendment) (EU Exit) Regulations 2019 (S.I. 2019/177), regs. 2, 57(b); 2020 c. 1, Sch. 5 para. 1(1)

F4 Words in art. 7(4)(c) substituted (31.12.2020) by The Statutory Auditors and Third Country Auditors (Amendment) (EU Exit) Regulations 2019 (S.I. 2019/177), regs. 2, 57(c); 2020 c. 1, Sch. 5 para. 1(1)

F5 Words in art. 7(5) substituted (31.12.2020) by The Statutory Auditors and Third Country Auditors (Amendment) (EU Exit) Regulations 2019 (S.I. 2019/177), regs. 2, 57(d); 2020 c. 1, Sch. 5 para. 1(1)

F6 Art. 7(6) inserted (17.6.2016) by The Statutory Auditors and Third Country Auditors Regulations 2016 (S.I. 2016/649), regs. 1(1)(a), 19(2)

F7 Words in art. 7(6)(a) substituted (31.12.2020) by The Statutory Auditors and Third Country Auditors (Amendment) (EU Exit) Regulations 2019 (S.I. 2019/177), regs. 2, 57(e); 2020 c. 1, Sch. 5 para. 1(1)

F8 Words in art. 7(6)(b) substituted (31.12.2020) by The Statutory Auditors and Third Country Auditors (Amendment) (EU Exit) Regulations 2019 (S.I. 2019/177), regs. 2, 57(e); 2020 c. 1, Sch. 5 para. 1(1)

Marginal Citations

M2 Section 1253A was inserted by regulation 14 of S.I. 2007/3494.

M3 Section 1254 was amended by regulation 16 of S.I. 2007/3494.

M4 Section 1221 was amended by regulation 6 of S.I. 2007/3494.

M5 Section 1253B was inserted by regulation 14 of S.I. 2007/3494.

M6 Section 1253E was inserted by regulation 15 of S.I. 2007/3494 and substituted by regulation 3 of S.I. 2010/2537.

M7 Section 1241(2) was amended by regulation 31 of S.I. 2007/3494.

Appropriate audit authority U.K.

8.  The functions of the designated body include the receipt of notices under sections 522 and 523 of the Act (notices of auditor ceasing to hold office) and, accordingly, the designated body is the appropriate audit authority under section 525(1)(a)(ii) of the Act.

Consultation requirement U.K.

9.—(1) Before the designated body makes any order or regulations in exercise of the functions transferred to it by this Order, it must, unless paragraph (2) applies—

(a) publish the proposed order or regulations in such manner as appears to the body to be best calculated to bring the order or regulations to the attention of persons who may be affected by them;

(b) publish at the same time a statement that representations in respect of the proposals may be made to the body within a specified period which must not be less than [F9 4 weeks] following the date of publication of the proposed order or regulations; and

(c) have regard to any representations duly made in accordance with the statement before making the order or regulations.

(2) Paragraph (1) does not apply in any case in which the body considers that the delay involved in complying with that paragraph would be prejudicial to the public interest.

Textual Amendments

F9 Words in art. 9(1)(b) substituted (19.8.2014) by The Local Audit (Delegation of Functions) and Statutory Audit (Delegation of Functions) Order 2014 (S.I. 2014/2009), arts. 1(1), 10

Annual work programme U.K.

10.  The designated body must publish a work programme at least once in every calendar year.

Requirements for recording decisions U.K.

11.  The designated body must have satisfactory arrangements for—

(a) recording decisions made in the exercise of the functions transferred by this Order; and

(b) the safekeeping of the records of those decisions.

Matters notified to the designated body U.K.

12.—(1) If under section 1223(1) or 1243(1) the designated body requires notification or the provision of information, it must notify the Secretary of State of the requirement without undue delay.

(2) If the Secretary of State so requests, the designated body must send the Secretary of State a copy of any notification or information received pursuant to the requirement.

Payment of amounts of financial penalties (less costs) by designated body to Secretary of State U.K.

13.—(1) The designated body must, subject to subsection (2), pay the amount of a financial penalty under section 1225D M8 to the Secretary of State as soon as reasonably practicable after it is paid to the body.

(2) The designated body may deduct and retain from the amount of any financial penalty a sum in respect of its reasonable costs incurred in relation to the imposition of that penalty up to the time of the giving of the relevant notice under section 1225E(5).

(3) The costs of the designated body referred to in subsection (2) are—

(a) its administrative costs (including any administrative costs incurred in determining that the requirement or obligation in respect of which the financial penalty was imposed had not been complied with);

(b) its costs of obtaining legal advice (including any legal advice in connection with determining that the requirement or obligation in respect of which the financial penalty was imposed had not been complied with);

(c) any other costs incurred in determining that the requirement or obligation in respect of which the financial penalty was imposed had not been complied with.

Marginal Citations

M8 Section 1225D is inserted by article 3 of this Order.

Time limits for prosecution of offences U.K.

14.  Section 1256(1), (2), (4) and (6) of the Act (time limits for prosecution of offences) has effect as if the references to the Secretary of State were references to the Secretary of State or the designated body.

Appointment of body to issue guidance as to identifying senior statutory auditor U.K.

15.  The designated body is appointed for the purposes of section 504(1)(b)(ii) of the Act (body to issue guidance on meaning of senior statutory auditor).

Transitional Provisions U.K.

16.—(1) Anything which—

(a) relates to any function transferred by virtue of this Order; and

(b) is in the process of being done by or in relation to the body known as the Professional Oversight Board immediately before coming into force,

may be continued by or in relation to the designated body.

(2) Guidance issued by the body known as the Auditing Practices Board for the purposes mentioned in article 15 and which is in effect immediately before coming into force shall be treated as if it were issued by the designated body.