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Part 2E+WLocal authorities: governance and audit

Prospective

Chapter 3E+WAudit of entities connected with local authorities

Audit of accountsE+W

43Right of entity to appoint auditor to conduct statutory auditE+W

(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—

(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 [F1Auditor General for Wales] must notify the entity of its right under subsection (1).

(4)Notification under subsection (3) must be before the beginning of the financial year (except in the case of an appointment for the first financial year of the entity or which is made under section 39).

(5)Termination by the [F2Auditor General for Wales] of the appointment under this Chapter does not terminate an appointment made pursuant to subsection (1).

(6)In subsection (1) “the relevant statutory provision”—

(a)in relation to a company, means Part 16 of the Companies Act 2006 (c. 46);

(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 [F3a registered society] , means—

(i)[F4section 83 of the Co-operative and Community Benefit Societies Act 2014,] or

(ii)in the case of [F3a registered society] to which regulation 3 of the Insurance Accounts Directive (Miscellaneous Insurance Undertakings) Regulations 2008 (SI 2008/565) 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 [F5Auditor General for Wales] from time to time.

(8)Before publishing terms and conditions under subsection (7) [F6the Auditor General for Wales] must consult—

(a)such associations of local authorities, and such bodies of accountants, as the [F7Auditor General for Wales] considers appropriate, and

[F8(b)the Welsh Ministers.]

Textual Amendments

F1Words in s. 43(3) substituted (1.4.2015) by Local Audit and Accountability Act 2014 (c. 2), s. 49(1), Sch. 12 para. 105(2); S.I. 2015/841, art. 3(x) (with Sch. para. 10) (as amended (27.6.2016) by S.I. 2016/675, art. 2)

F2Words in s. 43(5) substituted (1.4.2015) by Local Audit and Accountability Act 2014 (c. 2), s. 49(1), Sch. 12 para. 105(2); S.I. 2015/841, art. 3(x) (with Sch. para. 10) (as amended (27.6.2016) by S.I. 2016/675, art. 2)

F5Words in s. 43(7) substituted (1.4.2015) by Local Audit and Accountability Act 2014 (c. 2), s. 49(1), Sch. 12 para. 105(2); S.I. 2015/841, art. 3(x) (with Sch. para. 10) (as amended (27.6.2016) by S.I. 2016/675, art. 2)

44Functions of auditor not appointed to conduct statutory auditE+W

(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 43(1), or

(b)the entity does so appoint that person but terminates the appointment before the discharge of the person's functions pursuant to the appointment.

(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 company on the annual accounts of the company for the financial year, and

(b)sections 495(2) to (4) and 496 to 501 of the Companies Act 2006 (c. 46) apply as if—

(i)that report were a report under section 495(1) of that Act, and

(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 year, and

(b)sections 495(2) to (4) and 498 to 501 of the Companies Act 2006 apply as if—

(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 auditor under Part 16 of that Act.

(4)Where this section applies to an entity which is [F3a registered society] —

(a)the person appointed under this Chapter must audit the revenue account or accounts and balance sheet of the society for the financial year and make a report to the society on them,

[F9(b)section 87(3) to (8) of the Co-operative and Community Benefit Societies Act 2014 apply in relation to that report as they apply to a report under section 87(2) of that Act,

(c)section 127(2) of that Act applies in relation to any contravention of section 87(6) 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 [F10section 98] 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 [F11subsection (7)] of that section.

(5)The person appointed under this Chapter must send a copy of the report made under this section to—

(a)the local authority with which the entity is connected, and

(b)the [F12Auditor General for Wales].

(6)In subsection (3) references to the Companies Act 2006 are to that Act as it applies in relation to limited liability partnerships.

Textual Amendments

F11Words in s. 44(4)(d) substituted (1.8.2014) by Co-operative and Community Benefit Societies Act 2014 (c. 14), s. 154, Sch. 4 para. 152(3)(b) (with Sch. 5)

F12Words in s. 44(5)(b) substituted (1.4.2015) by Local Audit and Accountability Act 2014 (c. 2), s. 49(1), Sch. 12 para. 106; S.I. 2015/841, art. 3(x) (with Sch. para. 10) (as amended (27.6.2016) by S.I. 2016/675, art. 2)