[F1494ZA.The maximum engagement periodU.K.
(1)Where a person is auditor of a company for consecutive financial years, the maximum engagement period of the person as auditor of the company—
(a)begins with the first of those years (see the appropriate entry in the first column of the following Table), and
(b)ends with the financial year specified in the corresponding entry in the second column of the Table:
| First financial year of the maximum engagement period | Last financial year of the maximum engagement period |
|---|---|
A financial year of the company beginning before 17 June 1994 | The last financial year of the company to begin before 17 June 2020. |
A financial year of the company beginning— (a) on or after 17 June 1994, and (b) before 17 June 2003 | The last financial year of the company to begin before 17 June 2023. |
A financial year of the company beginning— (a) on or after 17 June 2003, and (b) before 17 June 2016 | No qualifying selection procedure Where neither the first financial year of the maximum engagement period nor any subsequent financial year is one for which the auditor has been appointed following the carrying out of a qualifying selection procedure, the later of- (a) the last financial year of the company to begin before 17 June 2016, and (b) the last financial year of the company to begin within the period of 10 years beginning with the first day of the first financial year of the maximum engagement period. No qualifying selection procedure within 10 years Where the last day of the last financial year of the company to begin within the period of 10 years beginning with the first day of the last financial year of the company for which the auditor was appointed following a qualifying selection procedure is before 17 June 2016— (a) the last financial year of the company to begin before 17 June 2016, unless (b) the auditor is appointed following a qualifying selection procedure for the first financial year of the company to begin on or after 17 June 2016, in which case it is the last financial year of the company to begin within the period of 20 years beginning with the first day of the first financial year of the maximum engagement period. Qualifying selection procedure within 10 years In any other case, the earlier of- (a) the last financial year of the company to begin within the period of 10 years beginning with the first day of the last financial year of the company for which the auditor was appointed following a qualifying selection procedure, and (b) the last financial year of the company to begin within the period of 20 years beginning with the first day of the first financial year of the maximum engagement period. |
| A financial year of the company beginning on or after 17 June 2016 | The earlier of— (a) the last financial year of the company to begin within the period of 10 years beginning with the first day of the last financial year of the company for which the auditor was appointed following a qualifying selection procedure, and (b) the last financial year of the company to begin within the period of 20 years beginning with the first day of the first financial year of the maximum engagement period. |
(2)Where the first financial year of the maximum engagement period begins on or after 17 June 2003, the maximum engagement period may be extended by a period of no more than 2 years with the approval of the competent authority.
(3)Such approval may be given by the competent authority only if it is satisfied that exceptional circumstances exist.
(4)Where the competent authority gives its approval as mentioned in subsection (2)—
(a)the second column of the Table in subsection (1) has effect with the necessary modifications, and
(b)the first appointment to be made after the end of the period as so extended must be made following a qualifying selection procedure.
(5)[F2In this section] “qualifying selection procedure” means—
(a)in the case of an appointment for a financial year beginning on or after 17 June 2016 made after the Statutory Auditors and Third Country Auditors Regulations 2017 come into force—
(i)if the company is a private company and has an audit committee, a selection procedure that complies with the requirements of section 485A(4) and (5)(a) and (b),
(ii)if the company is a public company and has an audit committee, a selection procedure that complies with the requirements of subsections 489A(4) and (5)(a) and (b), and
(iii)if the company does not have an audit committee, a selection procedure that complies with the requirements of Article 16(3) and (4) of the Audit Regulation;
(b)in any other case, a selection procedure that substantially meets the requirements of Article 16(2) to (5) of the Audit Regulation, having regard to the circumstances at the time (including whether the company had an audit committee).]
Textual Amendments
F1S. 494ZA inserted (with effect in accordance with reg. 1(6)(8) of the amending S.I.) by The Statutory Auditors and Third Country Auditors Regulations 2017 (S.I. 2017/516), regs. 1(2), 12(14)
F2Words in s. 494ZA(5) substituted (1.1.2018) by The Statutory Auditors Regulations 2017 (S.I. 2017/1164), reg. 1(2)(3), Sch. 1 para. 20 (with reg. 2(6)(7))
Modifications etc. (not altering text)
C1S. 494ZA applied (with modifications) by S.I. 2008/565, reg. 6(1)(1A) (as substituted (with effect in accordance with reg. 2(4) of the amending S.I.) by The Statutory Auditors Regulations 2017 (S.I. 2017/1164), reg. 1(2)(3), Sch. 2 para. 6(a) (with reg. 2(6)(7)))
C2Ss. 494A, 494ZA applied (with modifications) by S.I. 2008/1191, regs. 38A, 38B (as inserted (with effect in accordance with reg. 2(5)(a) of the amending S.I.) by The Statutory Auditors Regulations 2017 (S.I. 2017/1164), reg. 1(2)(3), Sch. 3 para. 12 (with reg. 2(6)(7)))