The Statutory Auditors and Third Country Auditors Regulations 2016

3.  In section 78 (auditor's report) M1 — U.K.

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

(b) for subsections (3A) to (4A) substitute—

“(3A) The auditor's report must include—

(a) the identity of the building society 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.

(4) The report must clearly state the opinion of the auditor as to—

(a) whether the annual accounts have been properly prepared in accordance with the requirements of this Act (and, where applicable, Article 4 of the IAS Regulation), and

(b) in particular whether the annual accounts give a true and fair view in accordance with the relevant financial reporting framework—

(i) in the case of an individual balance sheet, of the state of affairs of the society 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 for the financial year, and

(iii) in the case of group accounts, of the state of affairs as at the end of the financial year and 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.

(4A) The auditor's opinion 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 audit opinion,

(c) include a statement on any material uncertainty relating to events or conditions that may cast significant doubt about the building society's ability to continue as a going concern, and

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

(c) in subsection (6), after “subsection (4)” insert “ (b) ”;

(d) for subsection (7) substitute—

“(7) The auditor's report, in so far as it deals with the documents specified in subsection (3) above, must—

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

(i) the documents have been prepared so as to conform to the requirements of, or made under, sections 74 and 75 respectively,

(ii) the information given in the annual business statement gives a true representation of the matters in respect of which it is given, and

(iii) the information given in the directors' report for the financial year for which the accounts are prepared is consistent with those accounts,

(b) state whether, in the light of the knowledge and understanding of the building society and its environment obtained in the course of the audit, the auditor has identified material misstatements in the directors' report, and

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

(e) after subsection (10) insert—

“(11) Where more than one person is appointed as an auditor—

(a) all the persons appointed must jointly make a report under this section and the report must include a statement as to whether all the persons appointed agree—

(i) on the matters contained in the report, and

(ii) on the statements and indications given under subsection (7); and

(b) if all the persons appointed cannot agree on—

(i) the matters contained in the report, or

(ii) on the statements and indications given under subsection (7),

the report must include the opinions of each person appointed and give reasons for the disagreement.”.

Marginal Citations

M1 Section 78 was amended by paragraphs 1 and 7 of Schedule 9 to the Financial Services (Banking Reform) Act 2013 (c. 33) and by S.I. 1995/3233, 2004/3380, 2008/1519.