Part VIII Accounts and Audit

Auditors and audit of accounts

79F1Auditor’s duties and powers .

(1)

It is the duty of the F2auditor of a building society in preparing F3his report to the members under section 78, to carry out such investigations as will enable F4him to form an opinion as to the following matters—

(a)

whether F5adequate accounting records have been kept under section 71,

F6(b)

. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

(c)

whether the annual accounts are in agreement with the accounting records.

F7(2)

If the auditor is of the opinion that—

(a)

F8adequate accounting records have not been kept under section 71, or

(b)

the annual accounts are not in agreement with the accounting records,

the auditor must state that fact in his report.

(3)

Every auditor of a building society has—

(a)

a right of access at all times to the accounting and other records of the society and all other documents relating to its business, and

(b)

a right to require from the officers of the society such information and explanations as he thinks necessary for the performance of the duties of the auditors.

(4)

Where a building society has a F9connected undertaking, then—

(a)

if the F9connected undertaking is a body corporate incorporated in any part of the United Kingdom, it is the duty of the F9connected undertaking and F10its auditor to give to F11the society’s auditor such information and explanation, and such access to documents, as F12that auditor may reasonably require for the purposes of F13his duties as auditor of the society;

(b)

in any other case, it is the duty of the society, if required by F14its auditor to do so, to take all such steps as are reasonably open to it to obtain from the F9connected undertaking such information and explanation and such access as are mentioned above.

F15(5)

Subsection (4) above applied as regards any body associated with the society which is not a F16subsidiary undertaking as it applies as regards a F16subsidiary undertaking of the society.

(6)

If the F17auditor fails to obtain all the information and explanations and the access to documents which, to the best of F18his knowledge and belief, are necessary for the purposes of F18his audit, F19he shall state that fact in F18his report.

F20(6A)

Where more than one person is appointed as auditor, the report must include a statement as to whether all the persons appointed agree on any statements given under subsections (2) and (6) and, if they cannot agree on those statements, the report must include the opinions of each person appointed and give reasons for the disagreement.

(7)

The F21auditor of a building society have the right—

(a)

to attend any general meeting of the society, and to receive all notices of and other communications relating to any general meeting which any member of the society is entitled to receive, and

(b)

to be heard at any meeting which F22he attends on any part of the business of the meeting which concerns F23him as auditor.

(8)

If a building society or other body corporate fails to comply with subsection (4) above, the society or other body shall be liable on summary conviction to a fine not exceeding level 3 on the standard scale and so shall any officer of the society or, as the case may be, of the other body who is also guilty of the offence; and if an auditor fails without reasonable excuse to comply with paragraph (a) of that subsection he shall be liable, on summary conviction, to such a fine.

(9)

If a person who is an officer of a building society or of a body which is a F24connected undertaking of the society knowingly or recklessly makes to the F25auditor of that or another society or body a statement which—

(a)

conveys or purports to convey any information or explanation which the F26auditor requires, or is entitled to require, as auditor of the society or other body, as the case may be, and

(b)

is false or misleading in a material particular,

that person shall be liable—

(i)

on conviction on indictment, to imprisonment for a term not exceeding two years or to a fine, or both; and

(ii)

on summary conviction, to imprisonment for a term not exceeding six months or to a fine not exceeding the statutory maximum, or both.