Chwilio Deddfwriaeth

Companies Act 2006

Chapter 2: Individuals and Firms
Sections 1212 and 1213: Eligibility for appointment

1547.These sections are restatements of sections 25 and 28 of the 1989 Act adapted so as to apply in relation to statutory auditors. The sections provide that for a person or firm (defined in section 1261) to be eligible for appointment as a statutory auditor, the person must be a member of a recognised supervisory body and be eligible for appointment under the rules of that body. Section 1217(2) clarifies that references to such members include references to persons who are not members but who are subject to the body’s rules. (Section 1217 and Schedule 10 address the recognition of supervisory bodies, and lay down the requirements they must meet to be recognised.)

1548.Section 1213 provides that no person may act as a statutory auditor if he is ineligible. It specifies that, on becoming ineligible, the auditor must resign his office and give notice in writing. Failure to comply with this requirement is an offence, conviction of which can result in a fine (subsections (3) and (4)). If the auditor continues to act as a statutory auditor after conviction (subsection (5)), or continues to fail to give notice that he is ineligible for appointment as a statutory auditor (subsection (6)), he commits a further offence for which a daily fine may be imposed after conviction (subsection (7)). Subsection (8) provides a defence if the person did not know or had no reason to believe that he was, or had become, ineligible.

Section 1214: Independence requirement

1549.This section restates section 27 of the 1989 Act and indicates circumstances where a person may not act as a statutory auditor on grounds of lack of independence. Under subsection (2) this includes persons who are officers or employees of the audited entity, or the partner or employee of such a person. Under subsection (3), this includes where the person is an officer or employee of a subsidiary of the audited entity. Subsection (4) allows the Secretary of State to make regulations regarding other connections between the audited entity and the statutory auditor by virtue of which a person will be regarded as lacking independence.

Section 1215: Effect of lack of independence

1550.This section sets out the consequences of the prohibition from acting as a statutory auditor on grounds of lack of independence, as defined in section 1214. They replicate the effect of ineligibility as explained for section 1213.

Section 1216: Effect of appointment of a partnership

1551.This section is a restatement of section 26 of the 1989 Act. The effect of the section is to ensure that when a partnership constituted in England and Wales, Northern Ireland, or any other country or territory in which a partnership is not a legal person, is appointed as a statutory auditor under this Part, the appointment may continue even if a partner leaves the partnership. For a partnership or other person to be considered as appropriate for the appointment to continue, they must be eligible for appointment as a statutory auditor and not be prohibited (as indicated in section 1214(1)). Without this provision, the appointment would cease every time the membership of the partnership changed.

Section 1217: Supervisory bodies

1552.This section restates section 30 of the 1989 Act and defines a supervisory body as a body established in the UK which maintains and enforces rules regarding the eligibility of persons appointed as statutory auditors and the conduct of statutory audit work. Subsection (4) introduces Schedule 10, which specifies the requirements supervisory bodies must meet in order to be recognised, and the process for doing so.

Yn ôl i’r brig


Print Options


Nodiadau Esboniadol

Text created by the government department responsible for the subject matter of the Act to explain what the Act sets out to achieve and to make the Act accessible to readers who are not legally qualified. Explanatory Notes were introduced in 1999 and accompany all Public Acts except Appropriation, Consolidated Fund, Finance and Consolidation Acts.


Rhagor o Adnoddau

Access essential accompanying documents and information for this legislation item from this tab. Dependent on the legislation item being viewed this may include:

  • y PDF print gwreiddiol y fel deddfwyd fersiwn a ddefnyddiwyd am y copi print
  • rhestr o newidiadau a wnaed gan a/neu yn effeithio ar yr eitem hon o ddeddfwriaeth
  • manylion rhoi grym a newid cyffredinol
  • pob fformat o’r holl ddogfennau cysylltiedig
  • slipiau cywiro
  • dolenni i ddeddfwriaeth gysylltiedig ac adnoddau gwybodaeth eraill