Part 42 U.K.Statutory Auditors

Modifications etc. (not altering text)

C1 Pt. 42 applied (with modifications) (4.4.2014 for specified purposes, 16.12.2014 in so far as not already in force) by Local Audit and Accountability Act 2014 (c. 2), s. 49(1), Sch. 5 paras. 1-27 (with Sch. 13 para. 11); S.I. 2014/900, art. 2(j); S.I. 2014/3319, art. 2(e) (as amended: (31.12.2020) by S.I. 2019/177, regs. 2, 57; 2020 c. 1, Sch. 5 para. 1(1) and S.I. 2019/504, regs. 1(2), 3-6; 2020 c. 1, Sch. 5 para. 1(1); and (1.7.2022) by 2022 c. 31, s. 186(6), Sch. 4 para. 216, Sch. 7 para. 28; S.I. 2022/734, reg. 2(a), Sch. (with regs. 13, 29, 30); and (1.1.2024) by The Retained EU Law (Revocation and Reform) Act 2023 (Consequential Amendment) Regulations 2023 (S.I. 2023/1424), reg. 1(2), Sch. para. 82)

C2 Pt. 42 modified (6.4.2008) by The Statutory Auditors and Third Country Auditors Regulations 2007 (S.I. 2007/3494), reg. 43

C3 Pt. 42: functions transferred in part (6.4.2008 in accordance with art. 1 of the amending S.I.) by The Statutory Auditors (Delegation of Functions etc) Order 2008 (S.I. 2008/496), art. 4 (which amending S.I. was revoked (2.7.2012) by S.I. 2012/1741, art. 6)

C4 Pt. 42 applied (with modifications) (15.8.2008) by The Insurance Accounts Directive (Lloyd's Syndicate and Aggregate Accounts) Regulations 2008 (S.I. 2008/1950), reg. 6(5)

C5 Pt. 42: functions transferred in part (2.7.2012) by The Statutory Auditors (Amendment of Companies Act 2006 and Delegation of Functions etc) Order 2012 (S.I. 2012/1741), arts. 1(2), 7, 8, 9 (with art. 16)

Chapter 2 U.K.Individuals and firms

Independence requirement U.K.

1215 Effect of lack of independence U.K.

(1) If at any time during his term of office a statutory auditor becomes prohibited from acting by section 1214(1), he must immediately—

(a) resign his office (with immediate effect), and

(b) give notice in writing to the audited person that he has resigned by reason of his lack of independence.

(2) A person is guilty of an offence if—

(a) he acts as a statutory auditor in contravention of section 1214(1), or

(b) he fails to give the notice mentioned in paragraph (b) of subsection (1) in accordance with that subsection.

(3) A person guilty of an offence under subsection (2) is liable—

(a) on conviction on indictment, to a fine;

(b) on summary conviction, to a fine not exceeding the statutory maximum.

(4) A person is guilty of an offence if—

(a) he has been convicted of an offence under subsection (2)(a) or this subsection, and

(b) he continues to act as a statutory auditor in contravention of section 1214(1) after the conviction.

(5) A person is guilty of an offence if—

(a) he has been convicted of an offence under subsection (2)(b) or this subsection, and

(b) after the conviction, he continues to fail to give the notice mentioned in subsection (1)(b).

(6) A person guilty of an offence under subsection (4) or (5) is liable—

(a) on conviction on indictment, to a fine;

(b) on summary conviction, to a fine not exceeding [F1 one-tenth of the statutory maximum][F1 one-tenth of the greater of £5,000 or the amount corresponding to level 4 on the standard scale for summary offences] for each day on which the act or the failure continues.

(7) In proceedings against a person for an offence under this section it is a defence for him to show that he did not know and had no reason to believe that he was, or had become, prohibited from acting as statutory auditor of the audited person by section 1214(1).

Textual Amendments

F1 Words in s. 1215(6)(b) substituted (E.W.) (12.3.2015) by The Legal Aid, Sentencing and Punishment of Offenders Act 2012 (Fines on Summary Conviction) Regulations 2015 (S.I. 2015/664), reg. 1(1), Sch. 3 para. 9(25) (with reg. 5(1))