Building Societies Act 1986

Qualification and disqualification of auditors U.K.

5 (1) A person is not qualified for appointment as auditor of a building society[F1 unless– U.K.

(a) he is eligible for appointment as a company auditor under section 25 of the Companies Act 1989; or

(b) he is a member of a body of accountants, established in the United Kingdom or another member State, which is for the time being designated by order of the F2 . . . Treasury]

(2) None of the following persons is qualified for appointment as an auditor of a building society—

(a) a director or employee of the society;

(b) a person who is a partner of, or in the employment of, or who employs, a director or employee of the society;

(c) a person who is [F3 ineligible by virtue of section 27 of the Companies Act 1989 for appointment as auditor of a company which is a [F4 subsidiary undertaking] of the society.]

F5 (d) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

(3) Nothing in this paragraph shall prevent the appointment as auditor of a Scottish firm if none of the partners of the firm is by virtue of this paragraph disqualified for appointment as auditor of the society.

(4) The power to make an order under [F6 sub-paragraph (1)(b)] above is exercisable by statutory instrument subject to annulment by a resolution of either House of Parliament.

(5) No person shall act as auditor of a building society at a time when he knows that he is disqualified from appointment to that office; and if an auditor of a building society to his knowledge becomes so disqualified during his term of office he shall thereupon vacate his office and give notice to the society that he has vacated it by reason of that disqualification.

(6) A person who acts as auditor in contravention of sub-paragraph (5), or fails without reasonable excuse to give notice of vacating his office as required by that sub-paragraph, shall be liable—

(a) on conviction on indictment to a fine; or

(b) on summary conviction to a fine not exceeding the statutory maximum and, in the case of a continuing offence, to an additional fine not exceeding one-tenth of the statutory maximum for every day during which the offence continues.

Textual Amendments

F1 Words in Sch. 11 para. 5(1) substituted (1.10.1991) by S.I. 1991/1997, reg. 2, Sch. para. 65(3) (with reg. 4)

F2 Words in Sch. 11 para. 5(1)(b) repealed (1.12.2001) by S.I. 2001/2617, arts. 2(b), 13(2), Sch. 4 (with art. 13(3), Sch. 5); S.I. 2001/3538, art. 2

F3 Words in Sch. 11 para. 5(2)(c) substituted (1.10.1991) by S.I. 1991/1997, reg. 2, Sch. para. 65(4) (with reg. 4)

F4 Words in Sch. 11 para. 5(2)(c) substituted (1.12.1997) by 1997 c. 32, s. 43, Sch. 7 para. 61(a); S.I. 1997/2668, art. 2, Sch. Pt. I(j)(l)(xv)

F5 Sch. 11 para. 5(2)(d) repealed (13.11.1995) by S.I. 1995/2723, reg. 2

F6 Words in Sch. 11 para. 5(4) substituted (1.12.1997) by 1997 c. 32, s. 43, Sch. 7 para. 61(b); S.I. 1997/2668, art. 2, Sch. Pt. I(j)(l)(xv)

Modifications etc. (not altering text)

C1 Sch. 11 para. 5(1)(b): Functions of a Building Societies Commission transferred (1.12.2001) to the Treasury by S.I. 2001/2617, arts. 2(b), 4(1), Sch. 1 Pt. III; S.I. 2001/3538, art. 2