The Income Tax (Building Societies) (Audit Powers) Regulations 1992

Conditions of audit agreement referred to in regulation 6(3)

7.—(1) Paragraph (2) of this regulation specifies the audit, and paragraph (3) the terms and conditions, referred to in regulation 6(3).

(2) The audit specified by this paragraph is an audit consisting of—

(a) (i) a review by the auditor of the procedures put in place by the building society for the purpose of enabling the building society to comply with its obligations under regulation 11(4) of the Building Societies Regulations in relation to investments of the kind referred to in regulation 5(a); and

(ii) a check by the auditor of a sample of such investments in order to determine whether the procedures referred to in paragraph (i) have been observed in practice;

(b) a check by the auditor of a sample of investments of the kind referred to in regulation 5(a) in order to determine whether—

(i) the building society is in possession of valid declarations made pursuant to regulation 11(1) and (2) of the Building Societies Regulations and, where required by that regulation, certificates in support of those declarations; and

(ii) there is information in the building society’s possession which can reasonably be taken to indicate that the provisions of regulation 4(1)(a), (b) or (c) of the Building Societies Regulations are not or might not be applicable with respect to one or more of such investments.

(3) The terms and conditions specified by this paragraph are that—

(a) the Board are satisfied that the auditor is experienced in carrying out audits of a building society’s or a deposit-taker’s business;

(b) the auditor is instructed at the building society’s expense;

(c) the Board, the building society and the auditor reach agreement in relation to—

(i) the aspects of the procedures followed by the building society which are to form the subject of the audit;

(ii) the scope of the information which is to be provided in the audit report made to the Board; and

(iii) the scope of the sample checks referred to in paragraph (2)(a)(ii) and (b).

(d) the building society makes available to the auditor all such books, documents, records and other information as the auditor may reasonably require for the purpose of carrying out the audit and making the audit report;

(e) in carrying out the audit and making the audit report, the auditor has regard to the principles set out in the Special Reports booklet and, in particular, paragraphs 24 to 42 of that booklet;

(f) the audit is carried out periodically, and the periods to be covered by the audit shall be—

(i) as regards the first audit, the period commencing on such date as the Board and the building society may agree, being not earlier than 6th April 1991, and ending on a date determined by the Board;

(ii) as regards each subsequent audit, the period of one year following the end of the last audit period, or such longer period as the Board and the building society may agree;

(g) each audit is carried out, and the audit report furnished to the Board, not later than 180 days after the end of the period covered by that audit;

(h) at the same time as he furnishes the audit report to the Board, the auditor sends a copy of the report to the building society;

(i) n receipt of the audit report, the Board may require the auditor or the building society to furnish them with such further information as they may reasonably require for the purpose of clarifying any part of the report.