Companies Act 2014

369. (1) Section 332 (approval and signing of directors’ report) shall apply to a revised directors’ report save that, in the case of a revision effected by supplementary note, it shall apply as if it required a signature or signatures on the supplementary note instead of on the report.

• (2) Where copies of the original directors’ report have been sent to members under section 338, laid before the members in general meeting under section 341 or delivered to the Registrar under section 347, the directors shall, before approving the revised directors’ report under section 332, cause statements as to the following matters to be made in a prominent position in the revised directors’ report or, in the case of a revision effected by supplementary note, in that note—

• (a) in the case of a revision effected by replacement—

• (i) that the revised directors’ report replaces the original directors’ report for the financial year, specifying it,

• (ii) that it has been prepared as at the date of the original directors’ report and not as at the date of the revision and, accordingly, does not deal with events and transactions between those dates,

• (iii) the respects in which the original directors’ report did not comply with the requirements of this Act or, where applicable, of Article 4 of the IAS Regulation, and

• (iv) any significant amendments made consequential upon the remedying of those defects,

• (b) in the case of a revision effected by supplementary note—

• (i) that the note revises in certain respects the original directors’ report of the company and is to be treated as forming part of that original directors’ report, and

• (ii) that the directors’ report has been revised as at the date of the original directors’ report and not as at the date of the revision and accordingly does not deal with events and transactions between those dates,

and shall, when approving the revised directors’ report, cause the date on which the approval is given to be stated in them (or, in the case of revision effected by supplementary note, in that note).

• (3) Without prejudice to the generality of subsection (1), subsections (4) and (5) of section 332 shall have effect as if, in addition to the references in that subsection (4) to the requirements as to the signing of the directors’ report and the inclusion of the signatory’s name, there were included references in that subsection to each of the requirements of paragraph (a) or (b), as the case may be, of subsection (2).

370. Statutory auditors’ report on revised financial statements and revised report

370. (1) Subject to section 371 and subsection (3), a company’s current statutory auditors shall make a report or, as the case may be, a further report of the kind referred to in section 391, in the form required by section 336, to the company’s members under this section on revised financial statements prepared under section 366.

• (2) In that case, section 392 (assessment of accounting records) and section 393 (reporting of offences) shall apply with the necessary modifications.

• (3) Where the statutory auditors’ report on the original statutory financial statements was not made by the company’s current statutory auditors, the directors of the company may resolve that the report required by subsection (1) is to be made by the person or persons who made the first-mentioned report, provided that that person or those persons agree to do so and the person or persons would be qualified for appointment as statutory auditors of the company.

• (4) Where the person or persons so qualified agree to make that report (and proceed to do so)—

• (a) subsection (2) (application of sections 392 and 393) equally applies in such a case, and

• (b) subsequent references in this Chapter, in relation to a report under this section, to statutory auditors shall be read as references to that person or those persons.

• (5) Subject to section 379, a statutory auditors’ report under this section shall state whether, in the statutory auditors’ opinion, the revised financial statements have been properly prepared in accordance with the relevant financial reporting framework and, in particular, the provisions of this Act or, where applicable, of Article 4 of the IAS Regulation and, in relation to the latter, whether a true and fair view as at the date the original statutory financial statements were approved by the directors is given by the revised financial statements with respect to the matters set out in section 336.

• (6) The report shall also state whether, in the statutory auditors’ opinion, the original statutory financial statements failed to comply with the requirements of this Act or, where applicable, of Article 4 of the IAS Regulation in the respects identified by the directors in the statement required by section 368(2) to be made in the revised financial statements or supplementary note, as the case may be.

• (7) The statutory auditors shall also consider whether the information contained in the directors’ report for the financial year for which the revised financial statements are prepared (or where that report has been revised under this Chapter, the revised directors’ report) is consistent with those financial statements, and—

• (a) if they are of the opinion that it is, or

• (b) if they are of the opinion that it is not,

they shall state that fact in their report under this section.

• (8) Section 337 (signature of statutory auditor’s report) shall apply to a statutory auditors’ report under this section as it applies to a statutory auditors’ report referred to in section 336 with the necessary modifications.

• (9) A statutory auditors’ report under this section shall, upon being signed under section 337 as so applied, be, as from the date of signature, the statutory auditors’ report on the statutory financial statements of the company in place of the report on the original statutory financial statements.

371. Cases where company has availed itself of audit exemption

371. (1) Section 370 does not apply to a company that is entitled to, and avails itself of, the audit exemption unless subsection (2) applies.

• (2) Where as a result of the revisions to the statutory financial statements a company which, in respect of the original statutory financial statements, was entitled to, and availed itself of, the audit exemption becomes a company which is no longer entitled to that exemption, the company shall cause a report by the statutory auditors of the company on the revised financial statements to be prepared.

• (3) The report made in accordance with subsection (2) shall be delivered to the Registrar within 2 months after the date of the revision of the financial statements.

372. Statutory auditors’ report on revised directors’ report alone

372. (1) Subject to subsection (2), a company’s current statutory auditors shall make a report or, as the case may be, a further report, in the form required by section 336, to the company’s members on any revised directors’ report prepared under section 366 if the relevant statutory financial statements have not been revised at the same time.

• (2) Where the statutory auditors’ report on the original statutory financial statements was not made by the company’s current statutory auditors, the directors of the company may resolve that the report required by subsection (1) is to be made by the person or persons who made the first-mentioned report, provided that that person or those persons agree to do so and the person or persons would be qualified for appointment as statutory auditors of the company.

• (3) Where the person or persons so qualified agree to make that report (and proceed to do so), subsequent references in this Chapter, in relation to a report under this section, to statutory auditors shall be read as references to that person or those persons.

• (4) The report shall state that the statutory auditors have considered whether the information given in the revised report is consistent with the original statutory financial statements for the relevant year (specifying it) and—

• (a) if they are of the opinion that it is, or

• (b) if they are of the opinion that it is not,

they shall state that fact in their report.

• (5) Section 337 (signature of statutory auditor’s report) shall apply to a statutory auditors’ report under this section as it applies to a statutory auditors’ report under section 336 with the necessary modifications.

373. Effect of revision

373. (1) Upon the directors approving revised financial statements under section 324 as applied by section 368, the provisions of this Act shall have effect as if the revised financial statements were, as from the date of their approval, the statutory financial statements of the company in place of the original statutory financial statements.

• (2) In particular, the revised financial statements shall thereupon be the company’s statutory financial statements for the relevant financial year for the purposes of—

• (a) section 339 (right to demand copies of financial statements and reports) and section 340 (requirements in relation to publication of financial statements), and

• (b) each of the following (but only, in each case, if the requirements of the section concerned have not been complied with prior to the date of revision)—

• (i) section 338 (circulation of statutory financial statements),

• (ii) section 341 (financial statements and reports to be laid before the members in general meeting), and

• (iii) section 347 (documents to be annexed to annual return: all cases).

• (3) Upon the directors approving a revised directors’ report under section 332 as applied by section 369, the provisions of this Act shall have effect as if the revised report were, as from the date of its approval, the directors’ report in place of the original directors’ report.

• (4) In particular, the revised report shall thereupon be the directors’ report for the relevant financial year for the purposes of—

• (a) section 339 (right of members to demand copies of financial statements and reports), and

• (b) each of the following (but only, in each case, if the requirements of the section concerned have not been complied with prior to the date of revision):

• (i) section 338 (circulation of statutory financial statements);

• (ii) section 341 (financial statements and reports to be laid before the members in general meeting); and

• (iii) section 347 (documents to be annexed to annual return: all cases).

374. Publication of revised financial statements and reports

374. (1) This section has effect where the directors have prepared revised financial statements or a revised directors’ report under section 366 and copies of the original statutory financial statements or original directors’ report have been sent to any person under section 338.

• (2) The directors shall send to any such person—

• (a) in the case of a revision effected by replacement, a copy of the revised financial statements, or (as the case may be) the revised directors’ report, together with a copy of the statutory auditors’ report on those financial statements, or (as the case may be) on that report, or

• (b) in the case of a revision effected by supplementary note, a copy of that note together with a copy of the statutory auditors’ report on the revised financial statements, or (as the case may be) on the revised directors’ report,

not more than 28 days after the date of revision.

• (3) The directors shall also, not more than 28 days after the date of revision, send a copy of the revised financial statements or (as the case may be) the revised directors’ report, together with a copy of the statutory auditors’ report on those financial statements or (as the case may be) on that report, to any person who is not a person entitled to receive a copy under section 338 but who is, as at the date of revision—

• (a) a member of the company,

• (b) a holder of any debentures of the company, or

• (c) a person who is entitled to receive notice of general meetings.

• (4) If default is made in complying with this section, each of the directors who approved the revised financial statements under section 324 as applied by section 368 or the revised directors’ report under section 332 as applied by section 369 shall be guilty of a category 3 offence.

• (5) Where, prior to the date of revision of the original statutory financial statements, the company—

• (a) had completed sending copies of those financial statements under section 338, references in this Act to the day on which financial statements are sent under section 338 shall be read as references to the day on which the original statutory statements were sent under that section (applying subsection (8) of it as necessary) despite the fact that those financial statements have been revised, or

• (b) had not completed sending copies of those financial statements under section 338, the foregoing references in this Act shall be read as references to the day, or the last day, on which the revised financial statements are sent under this section.

375. Laying of revised financial statements or a revised report

375. (1) This section has effect where the directors of a company have prepared revised financial statements or a revised directors’ report under section 366 and copies of the original statutory financial statements or directors’ report have been laid before a general meeting of the company under section 341.

• (2) A copy of the revised financial statements or (as the case may be) the revised directors’ report, together with a copy of the statutory auditors’ report on those financial statements, or (as the case may be) on that report, shall be laid before the next general meeting of the company held after the date of revision at which any statutory financial statements for a financial year are laid, unless the revised financial statements, or (as the case may be) the revised directors’ report, have already been laid before an earlier general meeting.

376. Delivery of revised financial statements or a revised report

376. (1) This section has effect where the directors of a company have prepared revised financial statements or a revised directors’ report under section 366 and a copy of the original statutory financial statements or directors’ report, as annexed to the company’s annual return, has been delivered to the Registrar under section 343.

• (2) The directors of the company shall, within 28 days after the date of revision, deliver to the Registrar—

• (a) in the case of a revision effected by replacement, a copy of the revised financial statements or (as the case may be) the revised directors’ report, together with a copy of the statutory auditors’ report on those financial statements or (as the case may be) on that report, or

• (b) in the case of a revision effected by supplementary note, a copy of that note, together with a copy of the statutory auditors’ report on the revised financial statements or (as the case may be) on the revised report.

• (3) If a director fails to comply with subsection (2), he or she shall be guilty of a category 3 offence.

• (4) Without limiting the obligations of the directors of a company under this section or subsection (3), it shall be the duty of a person who is a shadow director or de facto director of a company to ensure that the requirements of subsection (2) are complied with in relation to the company.

• (5) If a person fails to comply with his or her duty under subsection (4), the person shall be guilty of a category 3 offence.

• (6) If the original statutory financial statements or directors’ report in respect of the company have been registered by the Registrar prior to the date of receipt by the Registrar of the revised financial statements or (as the case may be) the revised directors’ report, then, despite anything in section 373(2), this section shall operate so as to require—

• (a) that the revised financial statements or (as the case may be) the revised directors’ report be placed on the register, and

• (b) notwithstanding the taking of such action, that the original statutory financial statements or directors’ report continue to remain on the register.

• (7) Section 347(2) applies for the purposes of the construction of references to a copy of a document in subsection (2) of this section as it applies for the purpose of the construction of the reference to a copy of a document in section 347(1).

• (8) In this section “date of revision” means the date of revision of the original statutory financial statements.

377. Small and medium companies

377. (1) This section has effect (subject to section 379(2)) where the directors have prepared revised financial statements under section 366 and the company, prior to the date of revision, has, taking advantage of the exemption for a small F295[…] company conferred by section 352, delivered to the Registrar abridged financial statements.

• (2) Where the abridged financial statements so delivered to the Registrar would, if they had been prepared by reference to the matters taken account of in the revised financial statements, not comply with the provisions of this Act or, where applicable, of Article 4 of the IAS Regulation whether because—

• (a) the company would not have qualified as a small F296[…] company in the light of the revised financial statements, or

• (b) the financial statements have been revised in a manner which affects the content of the abridged financial statements,

the directors of the company shall have the following duty.

• (3) That duty is to cause the company either—

• (a) to deliver to the Registrar, within 28 days after the date of revision, a copy of the revised financial statements, together with a copy of the directors’ report and the statutory auditors’ report on the revised financial statements, or

• (b) if, on the basis of the revised financial statements, the company would be entitled under section 352 to do so, to prepare revised abridged financial statements under section 353 F297[…] and deliver them to the Registrar, together with a statement as to the effect of the revisions made,

and F298[sections 352 and 353] shall be read as being applicable in the circumstances referred to in paragraph (b) as they are applicable in circumstances not falling within this Chapter.

• (4) Where the abridged financial statements would, if they had been prepared by reference to the matters taken account of in the revised financial statements, comply with the requirements of this Act, or, where that Article is applicable, the relevant requirements of this Act and the requirements of Article 4 of the IAS Regulation, the directors of the company shall have the following duty.

• (5) That duty is to cause the company to deliver to the Registrar—

• (a) a note stating that the statutory financial statements of the company for the relevant financial year (specifying it) have been revised in a respect which has no bearing on the abridged financial statements delivered for that year, and

• (b) a copy of the statutory auditors’ report on the revised financial statements.

• (6) Revised abridged financial statements referred to in subsection (3)(b) or a note under subsection (5) shall be delivered to the Registrar within 28 days after the date of revision.

• (7) If a director fails to comply with his or her duty under subsection (2) or (4), he or she shall be guilty of a category 3 offence.

• (8) Without limiting the obligations of the directors of a company under this section or subsection (7), it shall be the duty of a person who is a shadow director or de facto director of a company to ensure that the requirements of subsections (3) and (5) are complied with in relation to the company.

• (9) If a person fails to comply with his or her duty under subsection (8), the person shall be guilty of a category 3 offence.

• (10) Section 347(2) applies for the purposes of the construction of references to a copy of a document in subsection (3) or (5) of this section as it applies for the purpose of the construction of the reference to a copy of a document in section 347(1).

• (11) In this section “date of revision” means the date of revision of the original statutory financial statements.

378. Application of this Chapter in cases where audit exemption available, etc.

378. Where, based on the revised financial statements prepared under section 366, a company—

• (a) is entitled to, and avails itself of, the audit exemption in respect of the financial year concerned, or

• (b) would have been entitled, but for the time that it takes to complete the preparation of those revised statements resulting in the directors not being able to make a decision in accordance with section 358(1) or (2) or section 365(1) (as the case may be) in that regard, to avail itself of the audit exemption in respect of that year,

this Chapter shall have effect as if any reference in it to a statutory auditors’ report, or to the making of such a report, were omitted.

379. Modifications of Act

379. (1) Where the provisions of the Act as to the matters to be included in the statutory financial statements of a company or (as the case may be) in a directors’ report have been amended after the date of the original statutory financial statements or (as the case may be) directors’ report but prior to the date of revision, references in sections 366 and 370(3) to the provisions of this Act shall be read as references to the provisions of this Act as in force at the date of approval of the original statutory financial statements or (as the case may be) directors’ report.

• (2) Where the provisions of section 353 F299[…] as to the matters to be included in abridged financial statements have been amended after the date of delivery of the original abridged financial statements but prior to the date of revision of the revised financial statements or report, references in section 370 to the provisions of this Act or to any particular provision of it shall be read as references to the provisions of this Act, or to the particular provision, as in force at the date of approval of the original abridged financial statements.

• F300[(3) Where before the repeal of section 354 by section 3(1) of the Companies (Accounting) Act 2017, a medium company referred to in section 354 has prepared and filed abridged financial statements for a financial year in accordance with that section, the company may prepare and file revised abridged financial statements in respect of that financial year as if the said section 354 had not been repealed.]

CHAPTER 18 Appointment of statutory auditors

380. Statutory auditors — general provisions (including as to the interpretation of provisions providing for auditors’ term of office)

380. (1) One or more statutory auditors shall be appointed in accordance with this Chapter for each financial year of the company.

• (2) For convenience of expression (but save in certain instances where use of the singular form is more appropriate) the plural form — “statutory auditors” — is used throughout this Part irrespective of the fact that a single statutory auditor has been or is to be so appointed.

• (3) A reference elsewhere in this Act to statutory auditors shall be read accordingly.

• (4) The appointment of a firm (not being a body corporate) by its firm name to be the statutory auditors of a company shall be deemed to be an appointment of those persons who are—

• (a) from time to time during the currency of the appointment the partners in that firm as from time to time constituted, and

• (b) qualified to be statutory auditors of that company.

• (5) Any—

• (a) reference in this Chapter to a person being appointed statutory auditor of a company to hold office until the conclusion of the next annual general meeting of the company, or

• (b) provision otherwise of this Chapter stating that a person appointed statutory auditor shall hold such office until the conclusion of such a general meeting,

shall be read as meaning that the person shall hold such office until the conclusion of such a general meeting save where one of the following sooner happens—

• (i) the person’s resignation (in accordance with this Part) or death,

• (ii) the termination of the person’s office (or his or her removal otherwise from office) pursuant to this Part, or

• F301[(iii) the person’s becoming disqualified from holding office by virtue of F302[the relevant provisions (within the meaning of section 900)].]

• F303[(6) A contractual clause which has the effect of restricting the choice by the general meeting of shareholders or members of a company pursuant to this Part to certain categories or lists of statutory auditors as regards the appointment of a particular statutory auditor to carry out the statutory audit of that company shall be prohibited and shall be void.]

381. Remuneration of statutory auditors

381. (1) The remuneration of the statutory auditors—

• (a) where they are appointed by the directors pursuant to this Chapter, shall be agreed with the directors,

• (b) where they are—

• (i) appointed by the members pursuant to this Chapter, or

• (ii) deemed under section 383(2) to be re-appointed,

may be fixed by the members—

• (I) at the annual general meeting or extraordinary general meeting concerned and thereafter at each annual general meeting subsequent to that meeting falling during the auditors’ term of office, or

• (II) in such other manner as the members may from time to time resolve,

or

• (c) where they are appointed by the F304[Authority pursuant to section 385, may be fixed by the Authority or, to the extent, and in the circumstances, that the Authority] authorises such to be done, by the directors or members.

• (2) For the purposes of this section, any sums paid by the company in respect of the statutory auditors’ expenses shall be deemed to be included in the expression “remuneration”.

382. Appointment of statutory auditors — first such appointments and powers of members vis a vis directors

382. (1) The first statutory auditors of a company may be appointed by the directors at any time before the first annual general meeting of the company.

• (2) Statutory auditors so appointed shall hold office until the conclusion of that first annual general meeting save that the company may, at a prior general meeting, remove any such auditors and appoint in their place as statutory auditors of the company any other persons who have been nominated for such appointment by any member of the company.

• (3) Notice of the nomination of those persons for such appointment shall have been given to the members of the company not less than 14 days before the date of the prior meeting.

• (4) If the directors of the company fail to exercise their powers under subsection (1), the company in general meeting may appoint the first statutory auditors of the company and, in the event of their doing so, those powers of the directors shall then cease.

• (5) Statutory auditors appointed by the company in general meeting pursuant to subsection (2) or (4) shall hold office until the conclusion of the first annual general meeting of the company.

383. Subsequent appointments of statutory auditors (including provision for automatic re-appointment of auditors at annual general meetings)

383. (1) Subject to subsection (2), a company shall at each annual general meeting appoint statutory auditors to hold office from the conclusion of that until the conclusion of the next annual general meeting.

• (2) Subject to subsection (3), at any annual general meeting a retiring statutory auditor, however appointed under this Part, shall be deemed to be re-appointed without any resolution being passed unless—

• (a) he or she is not qualified for re-appointment, or

• (b) a resolution has been passed at that meeting appointing somebody instead of him or her or providing expressly that he or she shall not be re-appointed, or

• (c) he or she has given the company notice in writing, in accordance with section 400, of his or her unwillingness to be re-appointed.

• (3) Where notice is given of an intended resolution to appoint some other person or persons in place of a retiring statutory auditor, and by reason of the death, incapacity or disqualification of that person or of all those persons, as the case may be, the resolution cannot be proceeded with, the retiring statutory auditor shall not be automatically re-appointed by virtue of subsection (2).

• (4) A retiring statutory auditor, however appointed under this Part, shall also be deemed to be re-appointed, as of the date on which the last member to sign it signed the resolution, in a case where the members of the company (by signing the resolution referred to in section 175(3)) have relieved the company of the obligation to hold an annual general meeting.

384. Appointment of statutory auditors by directors in other cases, etc.

384. (1) Where any casual vacancy in the office of statutory auditors arises, it shall be the duty of the directors to appoint statutory auditors to the company as soon as may be after that vacancy has arisen.

• (2) Whenever by reason of circumstances arising the company is not entitled to the audit exemption in respect of the financial year concerned, it shall be the duty of the directors of the company to appoint statutory auditors of the company as soon as may be after those circumstances arise.

• (3) Statutory auditors appointed pursuant to subsection (1) or (2) shall hold office until the conclusion of the next annual general meeting of the company held after their appointment.

385. Appointment of statutory auditors: failure to appoint

385. (1) Where at an annual general meeting of a company no statutory auditors are appointed by the members and the company is not entitled to avail itself of the audit exemption, the F305[Authority] may appoint one or more persons to fill the position of statutory auditors of the company.

• (2) A company shall—

• (a) within one week after the date on which the F305[Authority’s power under subsection (1) becomes exercisable in relation to the company, give the Authority] notice in writing of that fact, and

• (b) where a resolution removing the statutory auditors is passed, give notice of that fact in the prescribed form to the Registrar within 14 days after the date of the meeting at which the resolution removing the statutory auditors was passed.

• (3) If a company fails to give notice as required by subsection (2)(a) or (b), the company and any officer of it who is in default shall be guilty of a category 3 offence.

• (4) Statutory auditors appointed pursuant to subsection (1) shall hold office until the conclusion of the next annual general meeting of the company held after their appointment.

CHAPTER 19 Rights, obligations and duties of statutory auditors

386. Right of access to accounting records

386. Statutory auditors of a company shall have a right of access at all reasonable times to the accounting records of the company.

387. Right to information and explanations concerning company

387. (1) Statutory auditors of a company may require from the officers of the company such information and explanations as appear to the auditors to be within the officers’ knowledge or can be procured by them and which the statutory auditors think necessary for the performance of their duties.

• (2) Without limiting subsection (1), an officer of a company shall be guilty of a category 2 offence if the officer fails to comply—

• (a) within 2 days after the date on which it is made, with a requirement made of him or her by the statutory auditors of the company to provide to those auditors any information or explanations that those auditors require as statutory auditors of the company, or

• (b) within 2 days after the date on which it is made, with a requirement made of him or her by the statutory auditors of the holding company of that company to provide to those auditors any information or explanations that those auditors require as statutory auditors of the holding company,

being, in either case, information or explanations that is or are within the knowledge of, or can be procured by, the officer.

• (3) In any proceedings against a person in respect of an offence under subsection (2), it shall be a defence to prove that it was not reasonably possible for the person to comply with the requirement under subsection (2)(a) or (b) to which the offence relates within the time specified in that provision but that he or she complied with it as soon as was reasonably possible after the expiration of such time.

• (4) In this section “officer”, in relation to a company, includes any employee of the company and any shadow director and de facto director of it.

388. Right to information and explanations concerning subsidiary undertakings

388. (1) Where a company (in this section referred to as the “holding company”) has a subsidiary undertaking, then—

• (a) where the subsidiary undertaking is either—

• (i) an existing company, a company registered under this Act or a body established in the State, or

• (ii) a partnership or unincorporated body of persons having its principal place of business in the State,

it shall be the duty of the subsidiary undertaking and the statutory auditors, if any, of it to give to the statutory auditors of the holding company such information and explanations as the second-mentioned statutory auditors may reasonably require for the purposes of their duties as statutory auditors of the holding company,

• (b) in any other case, it shall be the duty of the holding company, if required by its statutory auditors to do so, to take all such steps as are reasonably open to it to obtain from the subsidiary undertaking such information and explanations as are mentioned in paragraph (a).

• (2) If an undertaking, body or other person fails to comply, within 5 days after the date on which it is made, with a requirement made of it or him or her under subsection (1)(a) or (b), the undertaking, body or other person, and any officer of the undertaking or body who is in default, shall be guilty of a category 2 offence.

• (3) In any proceedings against a person in respect of an offence under subsection (2), it shall be a defence to prove that it was not reasonably possible for the person to comply with the requirement under subsection (1)(a) or (b) to which the offence relates within the time specified in subsection (2) but that he or she complied with it as soon as was reasonably possible after the expiration of such time.

• (4) In subsection (2) “officer”, in relation to an undertaking or body, includes any employee of the undertaking or body and, if it is a company, any shadow director and de facto director of it.

389. Offence to make false statements to statutory auditors

389. (1) An officer of a company who knowingly makes a statement to which this section applies that is misleading or false in a material particular, or makes such a statement being reckless as to whether it is so, shall be guilty of a category 2 offence.

• (2) This section applies to any statement made to the statutory auditors of a company (whether orally or in writing) which conveys, or purports to convey, any information or explanation which they require under this Act, or are entitled so to require, as statutory auditors of the company.

• (3) In this section “officer”, in relation to a company, includes any employee of the company and any shadow director and de facto director of it.

390. Obligation to act with professional integrity

390. Without prejudice to the F306[Part 27], the one or more persons who are appointed as statutory auditors of a company shall be under a general duty to carry out the audit services concerned with professional integrity.

391. Statutory auditors’ report on statutory financial statements

391. The statutory auditors of a company shall make, in the form set out in section 336, a report to the members on all statutory financial statements laid before the members during their tenure of office.

392. Report to Registrar and to Director: accounting records

392. (1) If, at any time, the statutory auditors of a company form the opinion that the company is contravening, or has contravened, any of sections 281 to 285 the statutory auditors shall—

• (a) as soon as may be, by recorded delivery, serve a notice in writing on the company stating their opinion, and

• (b) not later than 7 days after the date of service of such notice on the company, notify the Registrar in the prescribed form of the notice and the Registrar shall forthwith forward a copy of the notice to the F307[Authority].

• (2) Where the statutory auditors form the opinion that the company has contravened any of sections 281 to 285 but that, following such contravention, the directors of the company have taken the necessary steps to ensure that those provisions are complied with, subsection (1)(b) shall not apply.

• (3) This section shall not require the statutory auditors to make the notifications referred to in subsection (1) if they are of the opinion that the contraventions concerned are minor or otherwise immaterial in nature.

• (4) Where the statutory auditors of a company make a notification pursuant to subsection (1)(b), they shall, if requested F307[by the Authority]—

• (a) furnish to the F307[Authority] such information, including an explanation of the reasons for their opinion that the company had contravened any of sections 281 to 285, and

• (b) give to the F307[Authority] such access to documents, including facilities for inspecting and taking copies,

being information or documents in their possession or control and relating to the matter the subject of the notification, F307[as the Authority] may require.

• (5) Any written information given in response to a request of the F307[Authority] under subsection (4) shall in all legal proceedings (other than proceedings for an offence) be admissible without further proof, until the contrary is shown, as evidence of the facts stated in it.

• (6) No professional or legal duty to which statutory auditors are subject by virtue of their appointment as statutory auditors of a company shall be regarded as contravened by, and no liability to the company, its shareholders, creditors or other interested parties shall attach to, statutory auditors, by reason of their compliance with an obligation imposed on them by or under this section.

• (7) Nothing in this section compels the disclosure by any person of any information that the person would be entitled to refuse to produce on the grounds of legal professional privilege or authorises the inspection or copying of any document containing such information that is in the person’s possession.

• (8) A person who fails to make the notification required by subsection (1)(a) or (b) or to comply with a request under subsection (4)(a) or (b) shall be guilty of a category 3 offence.

393. Report to Registrar and Director: category 1 and 2 offences

393. (1) Where, in the course of, and by virtue of, their carrying out an audit of the financial statements of the company, information comes into the possession of the statutory auditors of a company that leads them to form the opinion that F308[there are reasonable grounds for believing that a category 1 or 2 offence may have been committed by the company or an officer or agent of it,] the statutory auditors shall, forthwith after having formed it, notify that opinion to the F309[Authority and provide the Authority] with particulars of the grounds on which they have formed that opinion.

• (2) Where the statutory auditors of a company notify the F309[Authority of any matter pursuant to subsection (1), they shall, in addition to performing their obligations under that subsection, if requested by the Authority]—

• (a) furnish the F309[Authority with such further information in their possession or control relating to the matter as the Authority] may require, including further information relating to the particulars of the grounds on which they formed the opinion referred to in that subsection,

• (b) give the F309[Authority such access to books and documents in their possession or control relating to the matter as the Authority] may F310[require,]

• (c) give the F309[Authority such access to facilities for the taking of copies of or extracts from those books and documents as the Authority] may F310[require, and]

• F311[(d) furnish the Authority with such copies of, or extracts from, those books and documents as the Authority may require, accompanied by a certificate of the statutory auditors, bearing their signatures, stating that the copies or extracts so furnished are a true copy of, or extract from, the original books or documents concerned.]

• (3) Any written information given in response to a request of the F309[Authority] under subsection (2) shall in all legal proceedings (other than proceedings for an offence) be admissible without further proof, until the contrary is shown, as evidence of the facts stated in it.

• (4) No professional or legal duty to which statutory auditors are subject by virtue of their appointment as statutory auditors of a company shall be regarded as contravened by, and no liability to the company, its shareholders, creditors or other interested parties shall attach to, statutory auditors, by reason of their compliance with an obligation imposed on them by or under this section.

• (5) Nothing in this section compels the disclosure by any person of any information that the person would be entitled to refuse to produce on the grounds of legal professional privilege or authorises the inspection or copying of any document containing such information that is in the person’s possession.

• (6) A person who contravenes subsection (1) or fails to comply with a request under subsection (2) shall be guilty of a category 3 offence.

CHAPTER 20 Removal and resignation of statutory auditors

394. Removal of statutory auditors: general meeting

394. A company may, by ordinary resolution at a general meeting, remove a statutory auditor and appoint, in his or her place, any other person or persons, being a person or persons—

• (a) who have been nominated for appointment by any member of the company and who are qualified by virtue of F312[Part 27] to be statutory auditors of the company, and

• (b) of whose nomination notice has been given to its members,

but this is—

• (i) subject to section 395, and

• (ii) without prejudice to any rights of the statutory auditor in relation to his or her removal under this section.

395. Restrictions on removal of statutory auditor

395. (1) The passing of a resolution to which this section applies shall not be effective with respect to the matter it provides for unless—

• (a) in case the resolution provides for the auditor’s removal from office, there are good and substantial grounds for the removal related to the conduct of the auditor with regard to the performance of his or her duties as auditor of the company or otherwise, or

• (b) in the case of any other resolution to which this section applies, the passing of the resolution is, in the company’s opinion, in the best interests of the company,

but—

• (i) for the foregoing purposes, diverging opinions on accounting treatments or audit procedures cannot constitute the basis for the passing of any such resolution, and

• (ii) in paragraph (b) “best interests of the company” does not include any illegal or improper motive with regard to avoiding disclosures or detection of any failure by the company to comply with this Act.

• (2) This section applies to—

• (a) a resolution removing a statutory auditor from office,

• (b) a resolution at an annual general meeting appointing somebody other than the retiring statutory auditor as statutory auditor,

• (c) a resolution providing expressly that the retiring statutory auditor shall not be re-appointed.

396. Extended notice requirement in cases of certain appointments, removals, etc., of auditors

396. (1) Extended notice shall be required for:

• (a) a resolution at an annual general meeting of a company appointing as statutory auditors any persons other than the incumbent statutory auditors or providing expressly that the incumbent statutory auditors shall not be re-appointed;

• (b) a resolution at a general meeting of a company removing statutory auditors from office; and

• (c) a resolution at a general meeting of a company filling a casual vacancy in the office of statutory auditor.

• (2) For the purpose of this section extended notice shall comprise the following requirements:

• (a) the company shall be given by the person proposing the resolution not less than 28 days’ notice of the intention to move any such resolution; and

• (b) on receipt of notice of such an intended resolution, the company—

• (i) shall forthwith send a copy of it to the incumbent statutory auditors or the person (if any) whose ceasing to hold the office of statutory auditor of the company occasioned the casual vacancy, and

• (ii) shall give its members notice of any such resolution at the same time and in the same manner as it gives notice of the meeting or, if that is not practicable, shall give them notice of it, either by advertisement in a daily newspaper circulating in the district in which the registered office of the company is situate or in any other mode allowed by this Act, not less than 21 days before the date of the meeting.

• (3) If, after notice of the intention to move such a resolution has been given to the company, a meeting is called for a date 28 days or less after the date on which the notice has been given, the notice though not given within the time required by subsection (2) shall be deemed to have been properly given for the purposes of that subsection.

397. Right of statutory auditors to make representations where their removal or non-re-appointment proposed

397. (1) In this section “relevant meeting” means the meeting at which the resolution mentioned in section 396(1)(a) or (b), as the case may be, is to be considered.

• (2) Subject to subsection (4), where notice is given of such an intended resolution as is mentioned in section 396(1)(a) or (b) and the statutory auditors there mentioned make, in relation to the intended resolution, representations in writing to the company (not exceeding a reasonable length) and request their notification to be sent to members of the company, the company shall, unless the representations are received by it too late for it to do so—

• (a) in any notice of the resolution given to members of the company, state the fact of the representations having been made, and

• (b) send a copy of the representations to every member of the company to whom notice of the relevant meeting is sent (whether before or after receipt of the representations by the company).

• (3) If a copy of the representations is not sent as is mentioned in subsection (2) (because either they were received too late or because of the company’s default) the statutory auditors concerned may (without prejudice to their right to be heard orally) require that the representations shall be read out at the relevant meeting.

• (4) Copies of the representations need not be sent out and the representations need not be read out at the relevant meeting as mentioned in subsection (2) or (3) if, on the application either of the company or of any other person who claims to be aggrieved, the court is satisfied that the rights conferred by this section are being abused to secure needless publicity for defamatory matter and orders that those things need not be done.

• (5) The court may order the company’s costs on such an application to be paid in whole or in part by the statutory auditors concerned notwithstanding that they are not a party to the application.

398. Statutory auditors removed from office: their rights to get notice of, attend and be heard at general meeting

398. (1) Statutory auditors of a company who have been removed shall be entitled to attend—

• (a) the next annual general meeting of the company after their removal, and

• (b) the general meeting of the company at which it is proposed to consider a resolution for the filling of the vacancy occasioned by their removal,

and to receive all notices of, and other communications relating to, any such meeting which a member of the company is entitled to receive and to be heard at any general meeting that such a member attends on any part of the business of the meeting which concerns them as former statutory auditors of the company.

• (2) Subject to subsection (4), where notice is given of such an intended resolution as is mentioned in subsection (1) and the statutory auditors there mentioned make, in relation to the intended resolution, representations in writing to the company (not exceeding a reasonable length) and request their notification to be sent to members of the company, the company shall, unless the representations are received by it too late for it to do so—

• (a) in any notice of the resolution given to members of the company state the fact of the representations having been made, and

• (b) send a copy of the representations to every member of the company to whom notice of the meeting is sent (whether before or after receipt of the representations by the company).

• (3) If a copy of the representations is not sent as is mentioned in subsection (2) (because either they were received too late or because of the company’s default) the statutory auditors concerned may (without prejudice to their right to be heard orally) require that the representations shall be read out at the meeting.

• (4) Copies of the representations need not be sent out and the representations need not be read out at the meeting as mentioned in subsection (2) or (3) if, on the application either of the company or of any other person who claims to be aggrieved, the court is satisfied that the rights conferred by this section are being abused to secure needless publicity for defamatory matter and orders that those things need not be done.

• (5) The court may order the company’s costs on such an application to be paid in whole or in part by the statutory auditors concerned notwithstanding that they are not a party to the application.

399. Removal of statutory auditors: statement from statutory auditors where audit exemption availed of by company

399. (1) If a company, which avails itself of the audit exemption—

• (a) decides that the appointment of persons as statutory auditors to the company should not be continued during the whole or part of a financial year in which the exemption is being availed of in relation to the company, and

• (b) decides, accordingly, to terminate the appointment of those persons as statutory auditors to the company,

then—

• (i) the statutory auditors shall, within the period of 21 days after the date of their being notified by the company of that decision, serve a notice on the company containing the statement referred to in subsection (2),

• (ii) unless and until the statutory auditors serve such a notice, any purported termination of their appointment as statutory auditors to the company shall not have effect.

• (2) The statement to be contained in a notice under subsection (1)(i) shall be whichever of the following is appropriate, namely:

• (a) a statement to the effect that there are no circumstances connected with the decision of the company referred to in subsection (1) that the statutory auditors concerned consider should be brought to the notice of the members or creditors of the company; or

• (b) a statement of any such circumstances as mentioned in paragraph (a).

• (3) Where a notice under subsection (1)(i) is served on a company—

• (a) the statutory auditors concerned shall, within 14 days after the date of such service, send a copy of the notice to the Registrar, and

• (b) subject to subsection (4), the company shall, if the notice contains a statement referred to in subsection (2)(b), within 14 days after the date of such service, send a copy of the notice to every person who is entitled under section 338 to be sent copies of the documents referred to in that section.

• (4) Copies of a notice served on a company under subsection (1) need not be sent to the persons specified in subsection (3)(b), if, on the application of the company concerned or any other person who claims to be aggrieved, the court is satisfied that the notice contains material which has been included to secure needless publicity for defamatory matter and orders that that thing need not be done.

• (5) The court may order the company’s costs on such an application to be paid in whole or in part by the statutory auditors concerned notwithstanding that they are not a party to the application.

• (6) Section 398 shall not apply to statutory auditors as respects their removal from office in the circumstances referred to in subsection (1).

400. Resignation of statutory auditors: general

400. (1) Statutory auditors of a company may, by a notice in writing that complies with subsection (3) served on the company and stating their intention to do so, resign from the office of statutory auditors to the company.

• (2) The resignation shall take effect on the date on which the notice is so served or on such later date as may be specified in the notice.

• (3) A notice under subsection (1) shall contain either—

• (a) a statement to the effect that there are no circumstances connected with the resignation to which it relates that the statutory auditors concerned consider should be brought to the notice of the members or creditors of the company, or

• (b) a statement of any such circumstances as mentioned in paragraph (a).

• (4) Where a notice under subsection (1) is served on a company—

• (a) the statutory auditors concerned shall, within 14 days after the date of such service, send a copy of the notice to the Registrar, and

• (b) subject to subsection (5), the company shall, if the notice contains a statement referred to in subsection (3)(b), not later than 14 days after the date of such service, send a copy of the notice to every person who is entitled under section 338 to be sent copies of the documents referred to in that section.

• (5) Copies of a notice served on a company under subsection (1) need not be sent to the persons specified in subsection (4)(b) if, on the application of the company concerned or any other person who claims to be aggrieved, the court is satisfied that the notice contains material which has been included to secure needless publicity for defamatory matter and orders that that thing need not be done.

• (6) The court may order the company’s costs on such an application to be paid in whole or in part by the statutory auditors concerned notwithstanding that they are not a party to the application.

• (7) This section shall also apply to a notice given by statutory auditors referred to in section 383(2)(c) indicating their unwillingness to be re-appointed and, accordingly, for that purpose this section shall have effect as if—

• (a) the following subsection were substituted for subsection (1):

• “(1) Statutory auditors of a company may, by a notice in writing that complies with subsection (3) and which is served on the company, indicate their unwillingness to be re-appointed as statutory auditors to the company.”,

• (b) subsection (2) were omitted, and

• (c) the reference to the statutory auditors’ resignation in subsection (3) were a reference to the indication of their unwillingness to be re-appointed.

• (8) A person who fails to comply with—

• (a) subsection (3) or (4)(a), or

• (b) either such provision as it applies by virtue of subsection (7),

shall be guilty of a category 3 offence.

• (9) If default is made in complying with subsection (4)(b) or that provision as it applies by virtue of subsection (7), the company concerned and any officer of it who is in default shall be guilty of a category 3 offence.

• (10) In subsection (9) “officer” includes any shadow director and de facto director.

401. Resignation of statutory auditor: requisition of general meeting

401. (1) A notice served by statutory auditors on a company under section 400 which contains a statement in accordance with subsection (3)(b) of that section may also requisition the convening by the directors of the company of a general meeting of the company for the following purpose.

• (2) That purpose is the purpose of receiving and considering such information and explanation of the circumstances connected with the statutory auditors’ resignation from office as they may wish to give to the meeting.

• (3) Where the statutory auditors make such a requisition, the directors of the company shall, within 14 days after the date of service on the company of the foregoing notice, proceed duly to convene a general meeting of the company for a day not more than 28 days after the date of such service.

• (4) Subject to subsection (5), where—

• (a) a notice served on a company under section 400 contains a statement in accordance with subsection (3)(b) of that section, and

• (b) the statutory auditors concerned request the company to circulate to its members—

• (i) before the next general meeting after their resignation, or

• (ii) before any general meeting at which it is proposed to fill the vacancy caused by their resignation or convened pursuant to a requisition referred to in subsection (1),

a further statement in writing prepared by the statutory auditors of circumstances connected with their resignation that the statutory auditors consider should be brought to the notice of the members, the company shall—

• (i) in any notice of the meeting given to members of the company state the fact of the statement having been made, and

• (ii) send a copy of the statement to the Registrar and to every person who is entitled under section 338 to be sent copies of the documents referred to in that section.

• (5) Subsection (4) need not be complied with by the company concerned if, on the application either of the company or any other person who claims to be aggrieved, the court is satisfied that the rights conferred by this section are being abused to secure needless publicity for defamatory matter and orders that that subsection need not be complied with.

• (6) The court may order the company’s costs on such an application to be paid in whole or in part by the statutory auditors concerned notwithstanding that they are not a party to the application.

• (7) If default is made in complying with subsection (3) or (4), the company concerned and any officer of it who is in default shall be guilty of a category 3 offence.

• (8) In subsection (7) “officer” includes any shadow director and de facto director.

402. Resignation of statutory auditors: right to get notice of, attend, and be heard at general meeting

402. (1) Statutory auditors of a company who have resigned from the office of statutory auditors shall be permitted by the company to attend—

• (a) the next annual general meeting of the company after their resignation, and

• (b) any general meeting of the company at which it is proposed to fill the vacancy caused by their resignation or convened pursuant to a requisition of theirs referred to in section 401(1),

and, for that purpose, the company shall—

• (i) send them all notices of, and other communications relating to, any such meeting that a member of the company is entitled to receive, and

• (ii) permit them to be heard at any such meeting which they attend on any part of the business of the meeting which concerns them as former statutory auditors of the company.

• (2) If default is made in complying with subsection (1), the company concerned and any officer of it who is in default shall be guilty of a category 3 offence.

• (3) In subsection (2) “officer” includes any shadow director and de facto director.

CHAPTER 21 Notification to Supervisory Authority of certain matters and auditors acting while subject to disqualification order

403. Duty of auditor to notify Supervisory Authority regarding cessation of office

403. (1) Where, for any reason, during the period between the conclusion of the last annual general meeting and the conclusion of the next annual general meeting of a company, a statutory auditor ceases to hold office by virtue of section 394 or 400, the auditor shall—

• (a) in such form and manner as the Supervisory Authority specifies, and

• (b) within 30 days after the date of that cessation,

notify the Supervisory Authority that the auditor has ceased to hold office.

• (2) That notification shall be accompanied by—

• (a) in the case of resignation of the auditor, the notice served by the auditor under section 400(1), or

• (b) in the case of removal of the auditor at a general meeting pursuant to section 394, a copy of any representations in writing made to the company, pursuant to section 397(2), by the outgoing auditor in relation to the intended resolution except where such representations were not sent out to the members of the company in consequence of an application to the court under section 397(4).

• (3) Where, in the case of resignation, the notice served under section 400(1) is to the effect that there are no circumstances connected with the resignation to which it relates that the auditor concerned considers should be brought to the notice of members or creditors of the company, the notification under subsection (1) shall also be accompanied by a statement of the reasons for the auditor’s resignation.

• (4) In this section—

• (a) “resignation” includes an indication of unwillingness to be re-appointed at an annual general meeting; and

• (b) a reference to a notice served under section 400(1) includes a reference to a notice given by the auditor that is referred to in section 383(2)(c).

404. Duty of company to notify Supervisory Authority of auditor’s cessation of office

404. (1) Where, for any reason, during the period between the conclusion of the last annual general meeting and the conclusion of the next annual general meeting of a company, a statutory auditor ceases to hold office by virtue of section 394 or 400, the company shall—

• (a) in such form and manner as the Supervisory Authority specifies, and

• (b) within 30 days after the date of that cessation,

notify the Supervisory Authority that the auditor has ceased to hold office.

• (2) That notification shall be accompanied by—

• (a) in the case of resignation of the auditor, the notice served by the auditor under section 400(1), or

• (b) in the case of removal of the auditor at a general meeting pursuant to section 394—