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.

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.

A limited liability partnership 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 (as that Part applies to limited liability partnerships), the partnership is or will be exempt from audit under that Part for that year.

An industrial and provident society is exempt from audit under this Chapter 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.

Subsection (1) does not apply if the entity requests the audit authority to make the appointment.