|
| |
| |
| |
| |
(1) | In this Part a “supervisory body” means a body established in the United |
| |
Kingdom (whether a body corporate or an unincorporated association) which |
| |
maintains and enforces rules as to— |
| 5 |
(a) | the eligibility of persons for appointment as a statutory auditor, and |
| |
(b) | the conduct of statutory audit work, |
| |
| which are binding on persons seeking appointment or acting as a statutory |
| |
auditor either because they are members of that body or because they are |
| |
otherwise subject to its control. |
| 10 |
(2) | In this Part references to the members of a supervisory body are to the persons |
| |
who, whether or not members of the body, are subject to its rules in seeking |
| |
appointment or acting as a statutory auditor. |
| |
(3) | In this Part references to the rules of a supervisory body are to the rules |
| |
(whether or not laid down by the body itself) which the body has power to |
| 15 |
enforce and which are relevant for the purposes of this Part. |
| |
| This includes rules relating to the admission or expulsion of members of the |
| |
body, so far as relevant for the purposes of this Part. |
| |
(4) | Schedule 10 has effect with respect to the recognition of supervisory bodies for |
| |
the purposes of this Part. |
| 20 |
1182 | Exemption from liability for damages |
| |
(1) | No person within subsection (2) is to be liable in damages for anything done or |
| |
omitted in the discharge or purported discharge of functions to which this |
| |
| |
(2) | The persons within this subsection are— |
| 25 |
(a) | any recognised supervisory body, |
| |
(b) | any officer or employee of a recognised supervisory body, and |
| |
(c) | any member of the governing body of a recognised supervisory body. |
| |
(3) | Subsection (1) applies to the functions of a recognised supervisory body so far |
| |
as relating to, or to matters arising out of, any of the following— |
| 30 |
(a) | rules, practices, powers and arrangements of the body to which the |
| |
requirements of Part 2 of Schedule 10 apply; |
| |
(b) | the obligations with which paragraph 20 of that Schedule requires the |
| |
| |
(c) | any guidance issued by the body; |
| 35 |
(d) | the obligations imposed on the body by or by virtue of this Part. |
| |
(4) | The reference in subsection (3)(c) to guidance issued by a recognised |
| |
supervisory body is a reference to any guidance or recommendation which is— |
| |
(a) | issued or made by it to all or any class of its members or persons |
| |
seeking to become members, and |
| 40 |
(b) | relevant for the purposes of this Part, |
| |
| including any guidance or recommendation relating to the admission or |
| |
expulsion of members of the body, so far as relevant for the purposes of this |
| |
| |
| |
| |
|
| |
| |
(5) | Subsection (1) does not apply— |
| |
(a) | if the act or omission is shown to have been in bad faith, or |
| |
(b) | so as to prevent an award of damages in respect of the act or omission |
| |
on the ground that it was unlawful as a result of section 6(1) of the |
| |
Human Rights Act 1998 (c. 42) (acts of public authorities incompatible |
| 5 |
| |
Professional qualifications |
| |
1183 | Appropriate qualifications |
| |
(1) | A person holds an appropriate qualification for the purposes of this Chapter if |
| |
| 10 |
(a) | he holds a recognised professional qualification obtained in the United |
| |
| |
(b) | immediately before the commencement of this Chapter, he— |
| |
(i) | held an appropriate qualification for the purposes of Part 2 of |
| |
the Companies Act 1989 (c. 40) (eligibility for appointment as |
| 15 |
company auditor) by virtue of section 31(1)(a) or (c) of that Act, |
| |
| |
(ii) | was treated as holding an appropriate qualification for those |
| |
purposes by virtue of section 31(2), (3) or (4) of that Act, |
| |
(c) | immediately before the commencement of this Chapter, he— |
| 20 |
(i) | held an appropriate qualification for the purposes of Part III of |
| |
the Companies (Northern Ireland) Order 1990 (S.I. 1990/593 |
| |
(N.I. 5)) by virtue of Article 34(1)(a) or (c) of that Order, or |
| |
(ii) | was treated as holding an appropriate qualification for those |
| |
purposes by virtue of Article 34(2), (3) or (4) of that Order, |
| 25 |
(d) | he is within subsection (2), |
| |
(e) | he has been authorised to practise the profession of statutory auditor |
| |
pursuant to the European Communities (Recognition of Professional |
| |
Qualifications) (First General System) Regulations 2005 (S.I. 2005/18) |
| |
and has fulfilled any requirements imposed pursuant to regulation 6 of |
| 30 |
| |
(f) | subject to any direction under section 1185(5), he is regarded for the |
| |
purposes of this Chapter as holding an approved overseas |
| |
| |
(2) | A person is within this subsection if— |
| 35 |
(a) | before 1st January 1990, he began a course of study or practical training |
| |
leading to a professional qualification in accountancy offered by a body |
| |
established in the United Kingdom, |
| |
(b) | he obtained that qualification on or after 1st January 1990 and before 1st |
| |
| 40 |
(c) | the Secretary of State approves his qualification as an appropriate |
| |
qualification for the purposes of this Chapter. |
| |
(3) | The Secretary of State may approve a qualification under subsection (2)(c) only |
| |
if he is satisfied that, at the time the qualification was awarded, the body |
| |
concerned had adequate arrangements to ensure that the qualification was |
| 45 |
awarded only to persons educated and trained to a standard equivalent to that |
| |
required, at that time, in the case of a recognised professional qualification |
| |
| |
| |
|
| |
| |
under Part 2 of the Companies Act 1989 (eligibility for appointment as |
| |
| |
1184 | Qualifying bodies and recognised professional qualifications |
| |
(1) | In this Part a “qualifying body” means a body established in the United |
| |
Kingdom (whether a body corporate or an unincorporated association) which |
| 5 |
offers a professional qualification in accountancy. |
| |
(2) | In this Part references to the rules of a qualifying body are to the rules (whether |
| |
or not laid down by the body itself) which the body has power to enforce and |
| |
which are relevant for the purposes of this Part. |
| |
| This includes, so far as so relevant, rules relating to— |
| 10 |
(a) | admission to or expulsion from a course of study leading to a |
| |
| |
(b) | the award or deprivation of a qualification, or |
| |
(c) | the approval of a person for the purposes of giving practical training or |
| |
the withdrawal of such approval. |
| 15 |
(3) | Schedule 11 has effect with respect to the recognition for the purposes of this |
| |
Part of a professional qualification offered by a qualifying body. |
| |
1185 | Approval of overseas qualifications |
| |
(1) | The Secretary of State may declare that the following are to be regarded for the |
| |
purposes of this Chapter as holding an approved overseas qualification— |
| 20 |
(a) | persons who are qualified to audit accounts under the law of a specified |
| |
| |
(b) | persons who hold a specified professional qualification in accountancy |
| |
obtained in a specified foreign country. |
| |
(2) | A declaration under subsection (1)(b) may be expressed to be subject to the |
| 25 |
satisfaction of any specified requirement or requirements. |
| |
(3) | The Secretary of State may make a declaration under subsection (1) only if he |
| |
| |
(a) | in the case of a declaration under subsection (1)(a), the fact that the |
| |
persons in question are qualified to audit accounts under the law of the |
| 30 |
specified foreign country, or |
| |
(b) | in the case of a declaration under subsection (1)(b), the specified |
| |
professional qualification taken with any requirement or requirements |
| |
to be specified under subsection (2), |
| |
| affords an assurance of professional competence equivalent to that afforded by |
| 35 |
a recognised professional qualification. |
| |
(4) | The Secretary of State may make a declaration under subsection (1) only if he |
| |
is satisfied that the treatment that the persons who are the subject of the |
| |
declaration will receive as a result of it is comparable to the treatment which is, |
| |
or is likely to be, afforded in the specified foreign country or a part of it to— |
| 40 |
(a) | in the case of a declaration under subsection (1)(a), some or all persons |
| |
who are eligible to be appointed as a statutory auditor, and |
| |
(b) | in the case of a declaration under subsection (1)(b), some or all persons |
| |
who hold a corresponding recognised professional qualification. |
| |
| |
| |
|
| |
| |
(5) | The Secretary of State may direct that persons holding an approved overseas |
| |
qualification are not to be treated as holding an appropriate qualification for |
| |
the purposes of this Chapter unless they hold such additional educational |
| |
qualifications as the Secretary of State may specify for the purpose of ensuring |
| |
that such persons have an adequate knowledge of the law and practice in the |
| 5 |
United Kingdom relevant to the audit of accounts. |
| |
(6) | The Secretary of State may give different directions in relation to different |
| |
approved overseas qualifications. |
| |
(7) | The Secretary of State may, if he thinks fit, having regard to the considerations |
| |
mentioned in subsections (3) and (4), withdraw a declaration under subsection |
| 10 |
| |
(a) | persons becoming qualified to audit accounts under the law of the |
| |
specified foreign country after such date as he may specify, or |
| |
(b) | persons obtaining the specified professional qualification after such |
| |
| 15 |
(8) | The Secretary of State may, if he thinks fit, having regard to the considerations |
| |
mentioned in subsections (3) and (4), vary or revoke a requirement specified |
| |
under subsection (2) from such date as he may specify. |
| |
(9) | In this section “foreign country”, in relation to any time, means a country or |
| |
territory that, at that time, is not a “relevant State” within the meaning of the |
| 20 |
European Communities (Recognition of Professional Qualifications) (First |
| |
General System) Regulations 2005 (S.I. 2005/18) or part of such a State. |
| |
1186 | Eligibility of individuals retaining only 1967 Act authorisation |
| |
(1) | A person whose only appropriate qualification is based on his retention of an |
| |
authorisation originally granted by the Board of Trade or the Secretary of State |
| 25 |
under section 13(1) of the Companies Act 1967 (c. 81) is eligible only for |
| |
appointment as auditor of an unquoted company. |
| |
(2) | A company is “unquoted” if, at the time of the person’s appointment, neither |
| |
the company, nor any parent undertaking of which it is a subsidiary |
| |
undertaking, is a quoted company within the meaning of section 391(2). |
| 30 |
(3) | References to a person eligible for appointment as a statutory auditor by virtue |
| |
of this Part in enactments relating to eligibility for appointment as auditor of a |
| |
person other than a company do not include a person to whom this section |
| |
| |
| 35 |
1187 | Matters to be notified to the Secretary of State |
| |
(1) | The Secretary of State may require a recognised supervisory body or a |
| |
recognised qualifying body— |
| |
(a) | to notify him immediately of the occurrence of such events as he may |
| |
specify in writing and to give him such information in respect of those |
| 40 |
events as is so specified; |
| |
(b) | to give him, at such times or in respect of such periods as he may |
| |
specify in writing, such information as is so specified. |
| |
| |
| |
|
| |
| |
(2) | The notices and information required to be given must be such as the Secretary |
| |
of State may reasonably require for the exercise of his functions under this Part. |
| |
(3) | The Secretary of State may require information given under this section to be |
| |
given in a specified form or verified in a specified manner. |
| |
(4) | Any notice or information required to be given under this section must be |
| 5 |
given in writing unless the Secretary of State specifies or approves some other |
| |
| |
1188 | The Secretary of State’s power to call for information |
| |
(1) | The Secretary of State may by notice in writing require a person within |
| |
subsection (2) to give him such information as he may reasonably require for |
| 10 |
the exercise of his functions under this Part. |
| |
(2) | The persons within this subsection are— |
| |
(a) | any recognised supervisory body, |
| |
(b) | any recognised qualifying body, and |
| |
(c) | any person eligible for appointment as a statutory auditor by virtue of |
| 15 |
| |
(3) | The Secretary of State may require that any information which he requires |
| |
under this section is to be given within such reasonable time and verified in |
| |
such manner as he may specify. |
| |
| 20 |
| |
(1) | If at any time it appears to the Secretary of State— |
| |
(a) | in the case of a recognised supervisory body, that any requirement of |
| |
Schedule 10 is not satisfied, |
| |
(b) | in the case of a recognised professional qualification, that any |
| 25 |
requirement of Schedule 11 is not satisfied, or |
| |
(c) | that a recognised supervisory body or a recognised qualifying body has |
| |
failed to comply with an obligation to which it is subject under or by |
| |
| |
| he may, instead of revoking the relevant recognition order, make an |
| 30 |
application to the court under this section. |
| |
(2) | If on an application under this section the court decides that the requirement |
| |
in question is not satisfied or, as the case may be, that the body has failed to |
| |
comply with the obligation in question, it may order the body to take such |
| |
steps as the court directs for securing that the requirement is satisfied or that |
| 35 |
the obligation is complied with. |
| |
(3) | In this section “the court” means the High Court or, in Scotland, the Court of |
| |
| |
| |
| |
|
| |
| |
| |
| |
Eligibility for appointment |
| |
1190 | Auditors General: eligibility for appointment as a statutory auditor |
| |
(1) | In this Part “Auditor General” means— |
| 5 |
(a) | the Comptroller and Auditor General, |
| |
(b) | the Auditor General for Scotland, |
| |
(c) | the Auditor General for Wales, or |
| |
(d) | the Comptroller and Auditor General for Northern Ireland. |
| |
(2) | An Auditor General is eligible for appointment as a statutory auditor. |
| 10 |
(3) | Subsection (2) is subject to any suspension notice having effect under section |
| |
1198 (notices suspending eligibility for appointment as a statutory auditor). |
| |
| |
1191 | Individuals responsible for audit work on behalf of Auditors General |
| |
An Auditor General must secure that each individual responsible for statutory |
| 15 |
audit work on behalf of that Auditor General is eligible for appointment as a |
| |
statutory auditor by virtue of Chapter 2. |
| |
The Independent Supervisor |
| |
1192 | Appointment of the Independent Supervisor |
| |
(1) | The Secretary of State must appoint a body (“the Independent Supervisor”) to |
| 20 |
discharge the function mentioned in section 1193(1) (“the supervision |
| |
| |
(2) | An appointment under this section must be made by order. |
| |
(3) | A body may be appointed under this section only if it is a body corporate or an |
| |
unincorporated association which appears to the Secretary of State— |
| 25 |
(a) | to be willing and able to discharge the supervision function, and |
| |
(b) | to have arrangements in place relating to the discharge of that function |
| |
which are such as to be likely to ensure that the conditions in subsection |
| |
| |
| 30 |
(a) | that the supervision function will be exercised effectively, and |
| |
(b) | where the order is to contain any requirements or other provisions |
| |
specified under subsection (5), that that function will be exercised in |
| |
accordance with any such requirements or provisions. |
| |
(5) | An order under this section may contain such requirements or other provisions |
| 35 |
relating to the exercise of the supervision function by the Independent |
| |
Supervisor as appear to the Secretary of State to be appropriate. |
| |
| |
| |
|
| |
| |
(6) | An order under this section is subject to negative resolution procedure. |
| |
Supervision of Auditors General |
| |
1193 | Supervision of Auditors General by the Independent Supervisor |
| |
(1) | The Independent Supervisor must supervise the performance by each Auditor |
| |
General of his functions as a statutory auditor. |
| 5 |
(2) | The Independent Supervisor must discharge that duty by— |
| |
(a) | entering into supervision arrangements with one or more bodies, and |
| |
(b) | overseeing the effective operation of any supervision arrangements |
| |
| |
(3) | For this purpose “supervision arrangements” are arrangements entered into by |
| 10 |
the Independent Supervisor with a body, for the purposes of this section, in |
| |
accordance with which the body does one or more of the following— |
| |
(a) | determines standards relating to professional integrity and |
| |
independence which must be applied by an Auditor General in |
| |
| 15 |
(b) | determines technical standards which must be applied by an Auditor |
| |
General in statutory audit work and the manner in which those |
| |
standards are to be applied in practice; |
| |
(c) | monitors the performance of statutory audits carried out by an Auditor |
| |
| 20 |
(d) | investigates any matter arising from the performance by an Auditor |
| |
General of a statutory audit; |
| |
(e) | holds disciplinary hearings in respect of an Auditor General which |
| |
appear to be desirable following the conclusion of such investigations; |
| |
(f) | decides whether (and, if so, what) disciplinary action should be taken |
| 25 |
against an Auditor General to whom such a hearing related. |
| |
(4) | The Independent Supervisor may enter into supervision arrangements with a |
| |
body despite any relationship that may exist between the Independent |
| |
Supervisor and that body. |
| |
(5) | The Independent Supervisor must notify each Auditor General in writing of |
| 30 |
any supervision arrangements that it enters into under this section. |
| |
(6) | Supervision arrangements within subsection (3)(f) may, in particular, provide |
| |
for the payment by an Auditor General of a fine to any person. |
| |
(7) | Any fine received by the Independent Supervisor under supervision |
| |
arrangements is to be paid into the Consolidated Fund. |
| 35 |
1194 | Duties of Auditors General in relation to supervision arrangements |
| |
(1) | Each Auditor General must— |
| |
(a) | comply with any standards of the kind mentioned in subsection (3)(a) |
| |
or (b) of section 1193 determined under the supervision arrangements, |
| |
(b) | take such steps as may be reasonably required of that Auditor General |
| 40 |
to enable his performance of statutory audits to be monitored by means |
| |
of inspections carried out under the supervision arrangements, and |
| |
| |
| |
|
