|
| |
|
(i) | the end of that financial year, and |
| |
(ii) | the end of the period of three months beginning with the day on |
| |
which the audit authority receives notification in relation to the |
| |
entity under section 34(1)(a) or (2)(a). |
| |
(4) | The Audit Commission may make an appointment under this section if (and |
| 5 |
only if) it appears to the Audit Commission that— |
| |
(a) | the entity will be a qualifying English local authority entity at the start |
| |
of the financial year for which the appointment is made, or |
| |
(b) | in the case of an appointment for the first financial year of the entity, the |
| |
entity is a qualifying English local authority entity when the |
| 10 |
| |
(5) | The Auditor General for Wales may make an appointment under this section |
| |
if (and only if) it appears to the Auditor General that— |
| |
(a) | the entity will be a qualifying Welsh local authority entity at the start of |
| |
the financial year for which the appointment is made, or |
| 15 |
(b) | in the case of an appointment for the first financial year of the entity, the |
| |
entity is a qualifying Welsh local authority entity when the |
| |
| |
(6) | Before making an appointment under this section in relation to an entity the |
| |
appointing audit authority must consult the entity. |
| 20 |
(7) | Where one audit authority (“the first audit authority”) proposes to appoint a |
| |
person under this section in relation to an entity for a financial year in |
| |
circumstances where the other audit authority could also make an |
| |
appointment under this section in relation to that entity for that year— |
| |
(a) | the first audit authority must consult the other audit authority, and |
| 25 |
(b) | the first audit authority may not make the appointment for that entity |
| |
for that year if the other audit authority has already done so. |
| |
(8) | After making an appointment under this section in relation to an entity the |
| |
appointing audit authority must notify the local authority with which the |
| |
| 30 |
36 | Power to appoint replacement auditor |
| |
(1) | Where a person appointed by an audit authority under this Chapter in relation |
| |
to an entity for a financial year dies, is dismissed or is unable or unwilling to |
| |
act, the audit authority may (subject to this Chapter) appoint a replacement in |
| |
relation to that entity for that financial year. |
| 35 |
(2) | Before making an appointment under this section the audit authority must |
| |
| |
(3) | After making an appointment under this section the audit authority must |
| |
notify the local authority with which the entity is connected. |
| |
| 40 |
(1) | An audit authority may not make an appointment under this Chapter in |
| |
relation to an entity for a financial year if, by virtue of this section, the entity is |
| |
exempt from audit for that year. |
| |
|
| |
|
| |
|
(2) | A company is exempt from audit under this Chapter for a financial year if it |
| |
appears to the appointing audit authority that, for the purposes of Part 16 of |
| |
the Companies Act 2006 (c. 46), the company is or will be exempt from audit |
| |
under that Part for that year. |
| |
(3) | A limited liability partnership is exempt from audit under this Chapter for a |
| 5 |
financial year if it appears to the appointing audit authority that, for the |
| |
purposes of Part 16 of the Companies Act 2006 (as that Part applies to limited |
| |
liability partnerships), the partnership is or will be exempt from audit under |
| |
| |
(4) | An industrial and provident society is exempt from audit under this Chapter |
| 10 |
for a financial year if it appears to the appointing audit authority that |
| |
subsection (1) of section 4 of the Friendly and Industrial and Provident |
| |
Societies Act 1968 (c. 55) does not or will not apply to the society for that year |
| |
by virtue of subsection (2) of that section or section 4A(1) of that Act. |
| |
(5) | Subsection (1) does not apply if the entity requests the audit authority to make |
| 15 |
| |
| |
38 | Eligibility for appointment |
| |
(1) | A person appointed under this Chapter may be— |
| |
(a) | a member of staff of the appointing audit authority; |
| 20 |
(b) | an individual who is not a member of staff of that authority; |
| |
| |
(2) | The following may not be appointed under this Chapter in relation to an |
| |
| |
(a) | an individual or firm who for the purposes of section 1212 of the |
| 25 |
Companies Act 2006 is not eligible for appointment as a statutory |
| |
| |
(b) | an individual or firm who by virtue of section 1214 of that Act |
| |
(independence requirement) may not act as statutory auditor in |
| |
| 30 |
(3) | In this section “firm” means any entity, whether or not a legal person, which is |
| |
not an individual, and includes a body corporate, a corporation sole and a |
| |
partnership or other unincorporated association. |
| |
| |
(1) | Subject to this Chapter, a person appointed under this Chapter holds office |
| 35 |
under this Chapter in accordance with the terms of their appointment. |
| |
(2) | Subject to subsection (3), an appointment under this Chapter begins on the first |
| |
day of the financial year for which the appointment is made. |
| |
(3) | An appointment under this Chapter which— |
| |
(a) | is for the first financial year of an entity, or |
| 40 |
(b) | is made under section 36 after the start of the financial year for which it |
| |
| |
| begins on the day on which the appointment is made. |
| |
|
| |
|
| |
|
(4) | An appointment under this Chapter, unless terminated earlier, ends when the |
| |
person appointed has discharged their functions under this Chapter. |
| |
(5) | A person appointed under this Chapter may not be dismissed by the |
| |
appointing audit authority for divergence of opinion on accounting treatments |
| |
| 5 |
(6) | If it appears to the Audit Commission that an entity in relation to which it has |
| |
appointed a person under this Chapter is not, or has ceased to be, a qualifying |
| |
English local authority entity, the Commission may terminate the appointment |
| |
(but is not required to do so). |
| |
(7) | If it appears to the Auditor General for Wales that an entity in relation to which |
| 10 |
the Auditor General has appointed a person under this Chapter is not, or has |
| |
ceased to be, a qualifying Welsh local authority entity, the Auditor General |
| |
may terminate the appointment (but is not required to do so). |
| |
| |
40 | Right of entity to appoint auditor to conduct statutory audit |
| 15 |
(1) | Where a person is appointed under this Chapter in relation to an entity for a |
| |
financial year, the entity may, under and in accordance with the relevant |
| |
statutory provision, appoint that person as auditor of the entity for the |
| |
purposes of that provision for the financial year. |
| |
(2) | An appointment pursuant to subsection (1) is to be— |
| 20 |
(a) | on the standard terms and conditions, or |
| |
(b) | on the standard terms and conditions subject to such modifications as |
| |
may be agreed between the entity and the person appointed. |
| |
(3) | The audit authority must notify the entity of its right under subsection (1). |
| |
(4) | Notification under subsection (3) must be before the beginning of the financial |
| 25 |
year (except in the case of an appointment for the first financial year of the |
| |
entity or which is made under section 36). |
| |
(5) | Termination by the audit authority of the appointment under this Chapter |
| |
does not terminate an appointment made pursuant to subsection (1). |
| |
(6) | In subsection (1) “the relevant statutory provision”— |
| 30 |
(a) | in relation to a company, means Part 16 of the Companies Act 2006 |
| |
| |
(b) | in relation to a limited liability partnership, means that Part of that Act |
| |
as it applies to limited liability partnerships; |
| |
(c) | in relation to an industrial and provident society, means— |
| 35 |
(i) | section 4 of the Friendly and Industrial and Provident Societies |
| |
| |
(ii) | in the case of an industrial and provident society to which |
| |
regulation 3 of the Insurance Accounts Directive (Miscellaneous |
| |
Insurance Undertakings) Regulations 2008 (SI 2008/565) |
| 40 |
applies, that regulation. |
| |
(7) | In subsection (2), “standard terms and conditions” means terms and conditions |
| |
(including terms and conditions as to payment of fees) published for the |
| |
purposes of that subsection by the audit authority from time to time. |
| |
|
| |
|
| |
|
(8) | Before publishing terms and conditions under subsection (7) an audit authority |
| |
| |
(a) | such associations of local authorities, and such bodies of accountants, |
| |
as the audit authority considers appropriate, and |
| |
(b) | the Secretary of State (in the case of the Audit Commission) or the |
| 5 |
Welsh Ministers (in the case of the Auditor General for Wales). |
| |
41 | Functions of auditor not appointed to conduct statutory audit |
| |
(1) | This section applies to an entity in relation to which a person is appointed |
| |
under this Chapter for a financial year if— |
| |
(a) | the entity does not appoint that person pursuant to section 40(1), or |
| 10 |
(b) | the entity does so appoint that person but terminates the appointment |
| |
before the discharge of the person’s functions pursuant to the |
| |
| |
(2) | Where this section applies to an entity which is a company— |
| |
(a) | the person appointed under this Chapter must make a report to the |
| 15 |
company on the annual accounts of the company for the financial year, |
| |
| |
(b) | sections 495(2) to (4) and 496 to 501 of the Companies Act 2006 (c. 46) |
| |
| |
(i) | that report were a report under section 495(1) of that Act, and |
| 20 |
(ii) | the person appointed under this Chapter were the company’s |
| |
auditor under Part 16 of that Act. |
| |
(3) | Where this section applies to an entity which is a limited liability partnership— |
| |
(a) | the person appointed under this Chapter must make a report to the |
| |
partnership on the annual accounts of the partnership for the financial |
| 25 |
| |
(b) | sections 495(2) to (4) and 498 to 501 of the Companies Act 2006 apply as |
| |
| |
(i) | that report were a report under section 495(1) of that Act, and |
| |
(ii) | the person appointed under this Chapter were the partnership’s |
| 30 |
auditor under Part 16 of that Act. |
| |
(4) | Where this section applies to an entity which is an industrial and provident |
| |
| |
(a) | the person appointed under this Chapter must audit the revenue |
| |
account or accounts and balance sheet of the society for the financial |
| 35 |
year and make a report to the society on them, |
| |
(b) | section 9(2) to (7) of the Friendly and Industrial and Provident Societies |
| |
Act 1968 (c. 55) applies in relation to that report as in relation to a report |
| |
under section 9(1) of that Act, |
| |
(c) | section 18 of that Act applies in relation to any contravention of section |
| 40 |
9(5) of that Act (as applied by paragraph (b)), and |
| |
(d) | in a case where the society has caused group accounts for that year to |
| |
be prepared as specified in section 13 of that Act, the person appointed |
| |
under this Chapter must make a report to the society on the group |
| |
accounts, stating the matters referred to in subsection (5) of that section. |
| 45 |
(5) | The person appointed under this Chapter must send a copy of the report made |
| |
| |
|
| |
|
| |
|
(a) | the local authority with which the entity is connected, and |
| |
(b) | the appointing audit authority. |
| |
(6) | In subsection (3) references to the Companies Act 2006 (c. 46) are to that Act as |
| |
it applies in relation to limited liability partnerships. |
| |
| 5 |
42 | Public interest reports |
| |
(1) | A person appointed under this Chapter in relation to an entity must make a |
| |
report about any relevant matter— |
| |
(a) | which comes to their attention in discharging their functions arising |
| |
under or pursuant to the preceding provisions of this Chapter, and |
| 10 |
(b) | which they consider that it would be in the public interest to bring to |
| |
the attention of the entity, the local authority with which it is connected |
| |
| |
(2) | In subsection (1) “relevant matter” means— |
| |
(a) | a matter relating to the financial affairs of the entity for the financial |
| 15 |
| |
(b) | a matter relating to the corporate governance of the entity. |
| |
(3) | A report under this section must be sent to the entity before the end of the |
| |
period of 14 days starting with the day on which the report is made. |
| |
(4) | A copy of a report under this section must be sent before the end of that period |
| 20 |
| |
(a) | the local authority with which the entity is connected, and |
| |
| |
(5) | The person appointed under this Chapter may— |
| |
(a) | notify any person of the fact that the report has been made, and |
| 25 |
(b) | supply a copy of it or of any part of it to any person. |
| |
| |
(1) | A code of practice under section 4 of the Audit Commission Act 1998 (c. 18) |
| |
must include provision prescribing the way in which persons appointed under |
| |
this Chapter by the Audit Commission are to carry out their functions under |
| 30 |
| |
(2) | A person so appointed must, in the exercise of their functions under section 42, |
| |
comply with such provision of such a code as is for the time being in force. |
| |
(3) | Where provision under subsection (1) is included in a code of practice under |
| |
section 4 of the Audit Commission Act 1998 for the first time, the inclusion is |
| 35 |
to be regarded as an alteration for the purposes of subsection (5) of that section. |
| |
(4) | A code of practice under section 16 of the Public Audit (Wales) Act 2004 (c. 23) |
| |
must include provision prescribing the way in which persons appointed under |
| |
this Chapter by the Auditor General for Wales are to carry out their functions |
| |
| 40 |
(5) | A person so appointed must, in the exercise of their functions under section 42, |
| |
comply with such provision of such a code as is for the time being in force. |
| |
|
| |
|