The Statutory Auditors and Third Country Auditors Regulations 2017

5.  In section 73 (auditor’s report)(1)—

(a) in subsection (1), before “report” insert “written”;

(b) in subsection (2)—

(i) in paragraph (a) for “proper” substitute “adequate”; and

(ii) omit the words from “and, if the auditor” to the end;

(c) after subsection (2) insert—

“(2A) If the auditor is of the opinion that—

(a) adequate accounting records have not been kept under section 68, or

(b) the annual accounts are not in agreement with the accounting records,

the auditor must state that fact in his report.”;

(d) for subsection (4A) substitute—

“(4A) The auditor shall, in his report—

(a) state whether, in his opinion, based on the work undertaken in the course of the audit—

(i) the information given in the report of the committee of management for the financial year for which the annual accounts are prepared is consistent with those accounts,

(ii) that report has been prepared in accordance with this Act and the regulations made under it,

(b) state whether, in the light of the knowledge and understanding of the society or registered branch and its environment obtained in the course of the audit, the auditor has identified material misstatements in the report of the committee of management, and

(c) if applicable, give an indication of the nature of each of the misstatements referred to in paragraph (b).”;

(e) for subsections (5A) to (5D) substitute—

“(5A) The auditor’s report must include—

(a) the identity of the friendly society or registered branch whose annual accounts are the subject of the audit,

(b) a description of the annual accounts that are the subject of the audit (including the period covered by those accounts),

(c) a description of the financial reporting framework that has been applied in the preparation of those accounts, and

(d) a description of the scope of the audit identifying the auditing standards in accordance with which the audit was conducted.

(5B) The report must clearly state the opinion of the auditor as to whether the annual accounts—

(a) give a true and fair view—

(i) in the case of an individual balance sheet, of the state of affairs of the society or branch as at the end of the financial year,

(ii) in the case of an individual income and expenditure account, of the income and expenditure of the society or branch for the financial year, and

(iii) in the case of the group accounts of an incorporated friendly society, of the state of affairs as at the end of the financial year and of the income and expenditure for the financial year of the society and the subsidiary undertakings dealt with in the group accounts, so far as concerns members of the society,

(b) have been properly prepared in accordance with the relevant financial reporting framework, and

(c) have been prepared in accordance with the requirements of this Act (and where applicable, Article 4 of the IAS Regulation).

(5C) The auditor’s report must—

(a) be either unqualified or qualified,

(b) include a reference to any matters to which the auditor wishes to draw attention by way of emphasis without qualifying the report,

(c) include a statement on any material uncertainty relating to events or conditions that may cast significant doubt about the ability of the friendly society or registered branch to continue to adopt the going concern basis of accounting, and

(d) identify the auditor’s place of establishment.”;

(f) at the end insert—

“(6) Where more than one person is appointed as auditor, all the persons appointed must jointly make a report under this section, which must include a statement as to whether they all agree on—

(a) the matters contained in the report,

(b) the statements given under subsections (2A), (3) and (4A), and

(c) the indications given under subsection (4A).

(7) Where the persons do not all agree on all of those things, the report must—

(a) include the opinions of each person appointed, and

(b) give reasons for the disagreement.”.

(1)

Section 73 was amended by S.I. 2001/2617, 2005/2211 and 2008/1140.