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(9) The Secretary of State may by regulations amend this paragraph so as to
make provision about the members of a relevant authority’s auditor panel
who are or are not independent for the purposes of sub-paragraph (1).

Constitution of auditor panels: health service bodies

3 5The Secretary of State may by regulations make provision about—

(a) whether any of the members of a health service body’s auditor panel
must be independent and, if so, the proportion which must be
independent;

(b) whether the chair of a health service body’s auditor panel must be
10independent;

(c) the meaning of “independent” for the purposes of this paragraph.

Power to make further provision about constitution of auditor panels

4 (1) The Secretary of State may by regulations make provision about the
constitution of an auditor panel.

(2) 15This includes further provision about the matters mentioned in paragraph
2(1) and provision about—

(a) the number of members of an auditor panel;

(b) the appointment of members of an auditor panel (including to fill
casual vacancies);

(c) 20the term of office of members of an auditor panel;

(d) the removal or resignation of members of an auditor panel, or of its
chair;

(e) the payment of remuneration or allowances to members of an
auditor panel;

(f) 25the proceedings and validity of proceedings of an auditor panel.

(3) The regulations may provide for any of those matters to be determined for a
relevant authority’s auditor panel by the authority.

Application of local authority enactments to auditor panels

5 (1) The Secretary of State may by regulations—

(a) 30amend or otherwise modify any local authority enactment in its
application to auditor panels or members of auditor panels;

(b) apply any local authority enactment (with or without modifications)
to auditor panels or members of auditor panels if, or to the extent
that, it does not otherwise apply.

(2) 35In this paragraph—

Local Audit and Accountability BillPage 41

Status of auditor panels

6 (1) Where a relevant authority has determined that a committee of that
authority should be its auditor panel, the panel when acting as such is not be
treated as a committee of the authority for the purposes of any enactment.

(2) 5Sub-paragraph (1) is subject to provision made by regulations under
paragraph 5.

(3) References in this paragraph to a committee of a relevant authority include
a sub-committee of such a committee.

Expenses of auditor panels

7 10A relevant authority must meet the reasonable expenses of its auditor panel
incurred by the panel when acting as such.

Meaning of “connected entity”

8 (1) For the purposes of this Act, an entity (“E”) is connected with a relevant
authority at any time if E is an entity other than the relevant authority and
15the relevant authority considers that, in accordance with proper practices in
force at that time—

(a) the financial transactions, reserves, assets and liabilities of E are to be
consolidated into the relevant authority’s statement of accounts for
the financial year in which that time falls,

(b) 20the relevant authority’s share of the financial transactions, reserves,
assets and liabilities of E is to be consolidated into the relevant
authority’s statement of accounts for that financial year, or

(c) the relevant authority’s share of the net assets or net liabilities of E,
and of the profit or loss of E, are to be brought into the relevant
25authority’s statement of accounts for that financial year.

(2) In sub-paragraph (1) “entity” means any entity, whether or not a legal
person.

(3) The Secretary of State may by regulations amend sub-paragraph (1) or (2).

(4) In sub-paragraph (1) as it applies in relation to a health service body, the
30reference to the relevant authority’s statement of accounts is to be read as a
reference to the body’s accounts.

Section 17

SCHEDULE 5 Eligibility and regulation of local auditors

1 (1) Part 42 of the Companies Act 2006 (statutory auditors) applies in relation to
35local audits as it applies in relation to statutory audits within the meaning of
that Part, subject to—

(a) the general modifications to that Part in paragraph 2, and

(b) the specific modifications to that Part in the rest of this Schedule.

(2) For the purposes of this Schedule—

2 (1) The general modifications are that—

(a) 5references to a statutory auditor are to a local auditor,

(b) references to an audited person are to a relevant authority,

(c) references to a statutory audit are to a local audit,

(d) references to statutory audit work are to local audit work,

(e) references (however expressed) to Part 42 of the Companies Act 2006
10or any provision of that Part are to that Part or provision as it has
effect by virtue of this Schedule.

(2) Sub-paragraph (1) does not apply to a provision that—

(a) is treated as forming part of Part 42 of the Companies Act 2006 by
virtue of any of the following provisions of this Schedule, and

(b) 15provides for an expression listed in sub-paragraph (1) to have the
meaning it would have under that Part apart from its application by
virtue of this Schedule.

3 Omit the following provisions—

(a) Chapter 1 (introductory);

(b) 20sections 1220 (qualifying bodies and recognised professional
qualifications), 1221 (approval of third country qualifications) and
1222 (eligibility of individuals retaining only 1967 Act authorisation);

(c) section 1223A (notification of matters relevant to other EEA States);

(d) sections 1224A (restrictions on disclosure) and 1224B (offence of
25disclosure in contravention of section 1224A);

(e) Chapter 3 (Auditors General);

(f) Chapter 5 (registered third country auditors);

(g) sections 1253A to 1253F (co-operation with foreign competent
authorities);

(h) 30section 1264 (consequential amendments);

(i) Schedule 11 (recognised professional qualifications);

(j) Schedule 11A (specified persons, descriptions, disclosures etc for
purposes of section 1224A);

(k) Schedule 12 (arrangements in which registered third country
35auditors are required to participate);

(l) Schedule 14 (statutory auditors: consequential amendments).

4 In section 1212 (individuals and firms: eligibility for appointment as a
statutory auditor) omit subsection (2).

5 For section 1214 (independence requirement) substitute—

1214 40Independence requirement

(1) A person (“P”) may not act as local auditor of the accounts of a
relevant authority if one or more of subsections (2), (3), (4) and (5)
apply to P.

(2) This subsection applies if—

(a) 45P is a member or officer of the relevant authority,

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(b) where the relevant authority is a corporation sole, P is the
holder of that office, or

(c) P is a partner or employee of a person within paragraph (a)
or (b), or a partnership of which such a person is a partner.

(3) 5This subsection applies if—

(a) the relevant authority is a clinical commissioning group, and

(b) P is a member of the group’s governing body (established
pursuant to section 14L of the National Health Service Act
2006).

(4) 10This subsection applies if—

(a) P is a person elected or appointed—

(i) as an entity connected with the relevant authority,

(ii) to such an entity, or

(iii) to an office of such an entity,

(b) 15P is an employee of such an entity, or

(c) P is a partner or employee of a person within paragraph (a)
or (b), or a partnership of which such a person is a partner.

(5) This subsection applies if there exists a connection of a prescribed
description between—

(a) 20P or an associate of P, and

(b) the relevant authority or an entity connected with the
relevant authority.

(6) In subsection (5) “prescribed” means prescribed by regulations made
by the Secretary of State.

(7) 25Regulations under subsection (6) are subject to negative resolution
procedure.

6 In section 1215 (effect of lack of independence) omit subsections (2) to (7).

7 In section 1217 (supervisory bodies), for subsection (1A) substitute—

(1A) The rules referred to in paragraph 9(3)(b) (confidentiality of
30information) of Schedule 10 must also be binding on persons who—

(a) have sought appointment or acted as a local auditor, or

(b) have been members of the body at any time after the
commencement of Schedule 5 to the Local Audit and
Accountability Act 2013.

8 35For section 1219 (appropriate qualifications) substitute—

1219 Appropriate qualifications

(1) A person holds an appropriate qualification for the purposes of this
Chapter only if—

(a) the person holds a qualification that is an appropriate
40qualification in accordance with regulations under this
section, or

(b) the person holds an appropriate qualification for the
purposes of this Chapter as it has effect apart from its
application by virtue of Schedule 5 to the Local Audit and
45Accountability Act 2013.

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(2) The Secretary of State may by regulations provide for a qualification
to be an appropriate qualification for the purposes of this Chapter
if—

(a) it is a professional qualification in accountancy,

(b) 5it is obtained from a body established in the United Kingdom,
and

(c) it meets, or the Secretary of State thinks that it meets,
specified requirements.

(3) Regulations under this section may, in particular, provide for a
10qualification to be an appropriate qualification if—

(a) it is offered by a body (a “qualifying body”) established in the
United Kingdom (whether a body corporate or an
unincorporated association), and

(b) it is recognised by the Secretary of State in accordance with
15the regulations.

(4) Regulations under this section that contain provision under
subsection (3) may in particular—

(a) provide for the Secretary of State to make an order (a
“recognition order”) recognising a qualification offered by a
20qualifying body;

(b) make provision about the application by a qualifying body
for a recognition order;

(c) provide for the Secretary of State to give directions or impose
requirements in connection with the application;

(d) 25make provision about the circumstances in which the
Secretary of State may or must make or refuse to make a
recognition order;

(e) make provision about the steps to be taken by the Secretary
of State on making or refusing to make a recognition order;

(f) 30provide for a recognition order to be revoked by a further
order (a “revocation order”);

(g) make provision about the circumstances in which a
revocation order may or must be made;

(h) make provision about the date on which a revocation order
35may or must take effect;

(i) provide for a revocation order to contain transitional
provision;

(j) make provision about the steps to be taken by the Secretary
of State before or on making a revocation order.

(5) 40The requirements that may be specified for a qualification to be an
appropriate qualification or to be the subject of a recognition order
include, in particular, requirements as to—

(a) the persons to whom the qualification is open;

(b) the course of instruction undertaken by persons to whom the
45qualification is awarded;

(c) the professional experience of such persons;

(d) the examinations passed by such persons;

(e) the practical training undertaken by such persons;

Local Audit and Accountability BillPage 45

(f) the rules and arrangements of the body offering the
qualification for ensuring or monitoring compliance with
other specified requirements.

(6) Regulations under this section may in particular—

(a) 5provide for exceptions to a specified requirement;

(b) confer power on the Secretary of State to give or withhold
recognition or approval for the purposes of a specified
requirement.

(7) The Secretary of State may by regulations provide for a qualification
10to which section 3(5)(c) of the Audit Commission Act 1998 (approval
by Secretary of State) applied immediately before the relevant time
to be an appropriate qualification for the purposes of this Chapter
if—

(a) the person holding the qualification obtained it before the
15relevant time, or

(b) before the relevant time, that person began a course of study
or practical training leading to the qualification, and obtained
the qualification within a specified period beginning with the
relevant time.

(8) 20In subsection (7) “the relevant time” means the time at which
paragraph 8 of Schedule 5 to the Local Audit and Accountability Act
2013 comes into force.

(9) Regulations under this section are subject to negative resolution
procedure.

(10) 25In this section “specified” means specified in regulations under this
section.

(11) In this Part “recognised professional qualification” means a
professional qualification that is—

(a) offered by a qualifying body, and

(b) 30recognised by the Secretary of State in accordance with
regulations under this section.

(12) In this Act “recognised qualifying body” means a qualifying body
offering a recognised professional qualification.

9 After section 1224 insert—

1224ZA 35 Provision of documents to the Secretary of State

(1) For the purpose of assisting a person listed in subsection (2) to
maintain proper standards in the auditing of the accounts of a
relevant authority, the person may require the authority to make
available for inspection by that person—

(a) 40the accounts concerned, and

(b) the other documents relating to the relevant authority that
might reasonably be required by a local auditor for the
purposes of the audit.

(2) Those persons are—

(a) 45the Secretary of State,

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(b) a body designated by order under section 1252 (delegation of
Secretary of State’s functions under this Part), and

(c) a recognised supervisory body.

10 (1) Section 1225 (enforcement: general) applies with the following
5modifications.

(2) In subsection (1)(b), for “any requirement of Part 2 of Schedule 11 is not
satisfied” substitute “any requirement under regulations under section 1219
applying to the qualification is not satisfied”.

(3) In subsection (3), for “paragraph 3 of Schedule 11 (revocation of recognition
10orders)” substitute “any power of the Secretary of State to make a revocation
order under regulations under section 1219”.

11 In section 1225C(3) (compliance orders) omit “or, in Scotland, the Court of
Session”.

12 In section 1225F(10) (appeals against financial penalties) omit “or, in
15Scotland, the Court of Session”.

13 (1) Section 1239 (the register of auditors) applies with the following
modifications.

(2) In subsection (1) omit paragraph (b) and the “and” preceding it.

(3) In subsection (2)—

(a) 20at the end of paragraph (d) insert “, and”, and

(b) omit paragraph (f) and the “and” preceding it.

(4) After subsection (4) insert—

(4A) The regulations may provide for the register to be kept with the
register under regulations under this section in its original form.

(5) 25For subsection (5) substitute—

(5) The regulations may impose such obligations as the Secretary of
State thinks fit on—

(a) recognised supervisory bodies,

(b) recognised supervisory bodies within the meaning of this
30Part in its original form,

(c) any body designated by order under section 1252 (delegation
of Secretary of State’s functions under this Part),

(d) any body designated by order under that section in its
original form,

(e) 35persons eligible for appointment as a local auditor,

(f) persons eligible for appointment as a statutory auditor in
accordance with this Part in its original form,

(g) any person with whom arrangements are made by one or
more recognised supervisory bodies, or by any body
40designated by order under section 1252, with respect to the
keeping of the register, or

(h) any person with whom arrangements are made by one or
more recognised supervisory bodies within the meaning of
this Part in its original form, or by any body designated by
45order under section 1252 in its original form, with respect to

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the keeping of the register under regulations under this
section in its original form.

(6) Omit subsection (7).

(7) In subsection (8)—

(a) 5for “(5)(b) or (e)” substitute “(5)(c), (d), (g) or (h)”, and

(b) omit “or, in Scotland, by an order under section 45 of the Court of
Session Act 1988 (c. 36)1988 (c. 36)”.

(8) After subsection (9) insert—

(9A) References in subsections (4A) and (5) to this Part or a provision of
10this Part in its original form are to this Part or that provision as it has
effect apart from its application by virtue of Schedule 5 to the Local
Audit and Accountability Act 2013.

14 In section 1240(1)(b) (information to be made available to public), for “audit
work” substitute “local audit work”.

15 15For section 1248 (Secretary of State’s power to require second audit of
company) substitute—

1248 Secretary of State’s power to require second audit

(1) This section applies where a person appointed as a local auditor of
the accounts of a relevant authority (“the first auditor”) was not an
20appropriate person for any part of the period during which the audit
was conducted.

(2) The Secretary of State may direct the relevant authority to retain an
appropriate person—

(a) to conduct a second audit of the accounts in question, or

(b) 25to review the first audit and to report (giving the appropriate
person’s reasons) whether a second audit of those accounts is
needed.

(3) For the purposes of subsections (1) and (2) a person is “appropriate”
if the person—

(a) 30is eligible for appointment as a local auditor, and

(b) is not prohibited by section 1214(1) (independence
requirement) from acting as a local auditor of the accounts of
the relevant authority.

(4) The Secretary of State must send a copy of a direction under
35subsection (2) to the recognised supervisory body (if any) of which
the first auditor is or was a member.

(5) The relevant authority must—

(a) send a copy of a report under subsection (2)(b) to the
recognised supervisory body (if any) of which the first
40auditor is or was a member, and

(b) if the report states that a second audit is needed, take such
steps as are necessary for the carrying out of that audit.

(6) A direction under subsection (2) may specify when the authority
must comply with—

(a) 45the requirements of the direction, or

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(b) any requirement of subsection (5).

16 For section 1249 (supplementary provision about second audits)
substitute—

1249 Supplementary provisions about second audits

(1) 5If a person accepts an appointment, or continues to act, as a local
auditor of the accounts of a relevant authority at a time when the
person knows the person is not appropriate, the relevant authority
may recover from the person any costs incurred by it in complying
with the requirements of section 1248.

10For this purpose “appropriate” is to be construed in accordance with
subsection (3) of that section.

For this purpose “appropriate” is to be construed in accordance with
subsection (3) of that section.

(2) Where a second audit is carried out under section 1248, any statutory
15or other provision applying in relation to the first audit applies also,
in so far as practicable, in relation to the second audit.

17 (1) Section 1250 (misleading, false and deceptive statements) applies with the
following modifications.

(2) Omit subsection (3).

(3) 20In subsection (5)(b)—

(a) in sub-paragraph (i) omit “in England and Wales”, and

(b) omit sub-paragraph (ii).

(4) In subsection (6)—

(a) omit “, (3)”,

(b) 25in paragraph (a) omit “in England and Wales”, and

(c) omit paragraph (b).

(5) In each of subsections (7) and (8) omit “, (3)”.

18 (1) Section 1251 (fees) applies with the following modifications.

(2) In subsection (1), after “a recognition order under this Part” insert “or under
30regulations under this Part”.

(3) In subsection (2)—

(a) at the end of paragraph (a) insert “and”, and

(b) omit paragraphs (c) and (d).

19 In section 1251A (duty of Secretary of State to report on inspections) omit
35paragraph (a).

20 (1) Section 1252 (delegation of the Secretary of State’s functions) applies with
the following modifications.

(2) For subsection (3) substitute—

(3) A delegation order may provide that it has the effect of making the
40body designated under section 5 of the Freedom of Information Act
2000 (further power to designate public authorities), subject to
subsection (3A).

(3A) A delegation order may only provide that the body is so designated
to the extent that it is exercising functions transferred or conferred by

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the order (so that nothing in Parts 1 to 5 of that Act applies by virtue
of the order to information held by the body which does not relate to
the exercise of those functions).

(3) In subsection (4)(b) omit sub-paragraph (ii) and the “and” preceding it.

(4) 5In subsection (6) omit paragraph (b).

(5) Omit subsection (7).

21 In section 1253(5) (delegation of functions to an existing body)—

(a) for “to 22B” substitute “, 22”,

(b) omit “, 23A(1)”, and

(c) 10omit “or paragraph 1 or 2 of Schedule 12”.

22 (1) Section 1254 (directions to comply with international obligations) applies
with the following modifications.

(2) In subsection (1) omit “, the Independent Supervisor”.

(3) For subsection (3) substitute—

(3) 15A direction under this section given to a body designated by order
under section 1252 is enforceable on the application of the Secretary
of State by injunction.

23 (1) Section 1256 (time limits for prosecution of offences) applies with the
following modifications.

(2) 20In subsection (1) omit “in England and Wales”.

(3) Omit subsections (2) to (4).

(4) For subsection (5) substitute—

(5) This section does not authorise the trial of an information laid more
than 3 years after the commission of the offence.

(5) 25In subsection (6) omit “, the Lord Advocate, the Director of Public
Prosecutions for Northern Ireland”.

(6) In subsection (7) omit the words from “, section 331” to the end.

24 (1) Section 1257 (jurisdiction and procedure in respect of offences) applies with
the following modifications.

(2) 30In subsection (1), in each of paragraphs (a) and (b), after “at any place” insert
“in England and Wales”.

(3) Omit subsections (4) and (5).

25 (1) Section 1261 (minor definitions) applies with the following modifications.

(2) In subsection (1) omit the following definitions—

(3) In subsection (1), in the definition of “officer”, after “a body corporate” insert
“other than a relevant authority”.

(4) After subsection (1) insert—

(1A) 5Expressions used in this Part that are defined in the Local Audit and
Accountability Act 2013 have the same meaning as in that Act.

26 (1) Section 1262 (index of defined expressions) applies with the following
modifications.

(2) Omit the following entries—

(3) At the appropriate places insert—

“enactment section 41(1) of the Local Audit
30and Accountability Act 2013”;
““officer”, in relation to a
relevant authority
section 41(1) of the Local Audit
and Accountability Act 2013”;
““local audit” paragraph 1(2) of Schedule 5 to
the Local Audit and
35Accountability Act 2013”;
““local auditor” section 7(1) of the Local Audit
and Accountability Act 2013”;
““local audit work” paragraph 1(2) of Schedule 5 to
the Local Audit and
40Accountability Act 2013”;
““recognised qualifying body” section 1219(12)”;
““relevant authority” section 2(1) of the Local Audit
and Accountability Act 2013.

(4) In the entry for “officer”, after ““officer”” insert “, in relation to a body
45corporate other than a relevant authority”.

(5) In the entry for “qualifying body” for “section 1220(1)” substitute
“1219(3)(a)”.

(6) For the entry for “recognised, in relation to a professional qualification”
substitute—

“recognised professional
qualification”
50section 1219(11).

27 (1) Schedule 10 (recognised supervisory bodies) applies with the following
modifications.

(2) Omit the following paragraphs—

(a) 55paragraph 4 (recognition orders under old companies legislation to
have effect under Schedule);

(b) paragraphs 10B and 10C (public interest entity reporting and
independence requirements);

(c) paragraphs 16A to 16AB (transfer of papers to third countries);

(d) 60paragraph 20A (definition of public interest entity etc);

(e) paragraphs 22A and 22B (arrangements for setting standards
relating to public interest entity reporting and independence
requirements);

(f) paragraph 23A (arrangements for independent monitoring of third
65country audits).

(3) In paragraph 6 (holding of appropriate qualifications), in each of sub-
paragraphs (2)(a)(i) and (2A), after “recognised professional qualifications”
insert “(if there are any such qualifications)”.

(4) After paragraph 7 insert—

70Auditors to have sufficient skill and experience

7A (1) The body must have rules to the effect that a person is not eligible
for appointment as a local auditor unless—

(a) in the case of a firm, the key audit partner, or each of the
key audit partners, has an appropriate level of competence
75to carry out local audits, and

(b) in the case of an individual, the individual has an
appropriate level of competence to carry out local audits.

(2) Rules under sub-paragraph (1) must comply with guidance issued
by the Secretary of State.

(3) 80In sub-paragraph (1) “key audit partner” means an individual
identified by the firm as being primarily responsible for local
audits.

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(5) For paragraph 10A substitute—

Technical standards for group audit

10A (1) The body must have rules and practices as to technical standards
ensuring that local auditors undertaking a group audit—

(a) 5review for the purposes of the audit the audit work
conducted by other persons, and

(b) record that review.

(2) The body must participate in arrangements within paragraph 22
(arrangements for setting standards), and the rules and practices
10mentioned in sub-paragraph (1) must include provision requiring
compliance with any standards for the time being determined
under those arrangements.

(3) In this paragraph “group audit” means an audit that relates to the
statement of accounts of a relevant authority, or, where the
15relevant authority is a health service body, the accounts of the
body, in a case where, in accordance with proper practices, the
financial transactions of an entity other than the authority must be
consolidated into the statement or (as the case may be) the
accounts.

(4) 20In sub-paragraph (3) “entity” means any entity, whether or not a
legal person.

(6) For paragraph 13 substitute—

Monitoring of audits

13 (1) The body must—

(a) 25have adequate arrangements for enabling the performance
by its members of local audit functions, other than
functions in respect of major local audits, to be monitored
by means of inspections,

(b) in the case of members of the body who perform any local
30audit functions in respect of major local audits—

(i) participate in arrangements within paragraph
23(1), and

(ii) have rules and practices designed to ensure that a
sanction determined under paragraph 23(1)(b) is to
35be treated as if it were a sanction which the body
had determined under arrangements for
enforcement within paragraph 12(1A), and

(c) have rules designed to ensure that members of the body
take reasonable steps to enable their performance of any
40local audit functions to be monitored by means of
inspections.

(2) Any monitoring of members of the body under the arrangements
within paragraph 23(1) is to be regarded (so far as their
performance of local audit functions in respect of major local
45audits is concerned) as monitoring of compliance with the body’s
rules for the purposes of paragraph 12(1) and (1A).

Local Audit and Accountability BillPage 52

(3) The arrangements referred to in sub-paragraph (1)(a) must
include an inspection which is conducted in relation to each
person eligible for appointment as a local auditor at least once
every 6 years.

(4) 5The inspection must be conducted by persons who—

(a) have an appropriate professional education,

(b) have experience of—

(i) local audit work,

(ii) statutory audit work within the meaning of this
10Part of this Act as it has effect apart from its
application by virtue of Schedule 5 to the Local
Audit and Accountability Act 2013,

(iii) other audit work relating to any body whose
accounts form part of a group for which the
15Treasury prepares accounts under section 9(1) of
the Government Resources and Accounts Act 2000,
or

(iv) work equivalent to that within any of sub-
paragraphs (i) to (iii) on the audit of accounts under
20the law of an EEA State, or part of an EEA State,
other than the United Kingdom,

(c) have received adequate training in the conduct of
inspections concerning the audits of relevant authorities,
and

(d) 25do not have any interests likely to conflict with the proper
conduct of the inspection.

(5) The inspection must review one or more local audits in which the
person to whom the inspection relates has participated.

(6) The inspection must include an assessment of—

(a) 30the person’s compliance with the body’s rules established
for the purposes of paragraphs 9 (professional integrity
and independence), 10 (technical standards) and 10A
(technical standards for group audits),

(b) the resources allocated by the person to local audit work,

(c) 35in the case of an inspection in relation to a firm, its internal
quality control system, and

(d) the remuneration received by the person in respect of local
audit work.

(7) An inspection conducted in relation to a firm may be treated as an
40inspection of all individuals responsible for local audit work on
behalf of that firm, if the firm has a common quality assurance
policy with which each of those individuals is required to comply.

(8) The main conclusions of the inspection must be recorded in a
report which is made available to—

(a) 45the person to whom the inspection relates, and

(b) the body.

(9) The body must, at least once every calendar year, give to the
Secretary of State a summary of the results of inspections
conducted under this paragraph.

Local Audit and Accountability BillPage 53

(10) For the purposes of this Schedule a local audit of the accounts of a
relevant authority is a “major local audit” if the authority is
specified in, or of a description specified in—

(a) regulations made for the purposes of this sub-paragraph
5by the Secretary of State, or

(b) a direction (which has not been revoked) given by the
Secretary of State to the body.

(11) Regulations under sub-paragraph (10)(a) may in particular specify
a description of relevant authority by reference to its income or
10expenditure.

(12) Regulations under sub-paragraph (10)(a) are subject to negative
resolution procedure.

(13) A direction may be given under sub-paragraph (10)(b) only if the
Secretary of State thinks that there is significant public interest in
15the authority, or in authorities of the description, specified in the
direction.

(14) In this Schedule “local audit function” means any function
performed as a local auditor.

(7) In paragraph 23 (arrangements for independent monitoring of audits of
20listed companies and other major bodies)—

(a) in the heading, for “audits of listed companies and other major
bodies” substitute “major local audits”,

(b) for “statutory audit functions” in each place substitute “local audit
functions”,

(c) 25for “major audits” in each place substitute “major local audits”, and

(d) omit sub-paragraph (2).

(8) In paragraph 24 (arrangements for independent investigation for
disciplinary purposes of public interest cases)—

(a) in sub-paragraph (1)(a) omit “or third country audit functions”, and

(b) 30in sub-paragraph (2) omit the definitions of “statutory audit
function” and “third country audit function”.

(9) In paragraph 25(1) (supplementary: arrangements to operate independently
of body)—

(a) at the end of paragraph (c) insert “, or”, and

(b) 35omit paragraph (ca).

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