Building Societies Act 1986

Qualification and disqualification of auditors

5 (1) A person is not qualified for appointment as auditor of a building society unless he is a member of one or more of the following bodies—

(a) the Institute of Chartered Accountants in England and Wales;

(b) the Institute of Chartered Accountants of Scotland ;

(c) the Chartered Association of Certified Accountants ;

(d) the Institute of Chartered Accountants in Ireland ;

(e) any other body of accountants established in the United Kingdom and for the time being recognised by the Secretary of State for the purposes of section 389(1) of the [1985 c. 6.] Companies Act 1985; and

(f) any other body of accountants established in the United Kingdom or any other member State, being a body for the time being designated by order by the Commission with the consent of the Treasury.

(2) None of the following persons is qualified for appointment as an auditor of a building society—

(a) a director or employee of the society ;

(b) a person who is a partner of, or in the employment of, or who employs, a director or employee of the society ;

(c) a person who is disqualified from acting as auditor of any subsidiary of the society under section 389(6) of the [1985 c. 6.] Companies Act 1985 ;

(d) a body corporate.

(3) Nothing in this paragraph shall prevent the appointment as auditor of a Scottish firm if none of the partners of the firm is by virtue of this paragraph disqualified for appointment as auditor of the society.

(4) The power to make an order under sub-paragraph (1)(f) above is exercisable by statutory instrument subject to annulment by a resolution of either House of Parliament.

(5) No person shall act as auditor of a building society at a time when he knows that he is disqualified from appointment to that office; and if an auditor of a building society to his knowledge becomes so disqualified during his term of office he shall thereupon vacate his office and give notice to the society that he has vacated it by reason of that disqualification.

(6) A person who acts as auditor in contravention of sub-paragraph (5), or fails without reasonable excuse to give notice of vacating his office as required by that sub-paragraph, shall be liable—

(a) on conviction on indictment to a fine ; or

(b) on summary conviction to a fine not exceeding the statutory maximum and, in the case of a continuing offence, to an additional fine not exceeding one-tenth of the statutory maximum for every day during which the offence continues.