Legalize / United Kingdom / Public General Act

Companies Act 2006

Type Public General Act

Publication 2006-11-08

Last updated 2026-07-24

State In force

Department Statute Law Database

Source legislation.gov.uk

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“relevant direction” means a direction under section 67, 75, 76, 76A or 76B, other than a direction under section 76B(1)(b) given on the basis that, at the time at which a company’s name was registered, the Secretary of State had proper grounds for forming the opinion mentioned in section 57A.

Name that another company has been required to change

1198B

(1) Where a relevant direction has been given to a company to change its name, or it has been ordered under section 73 to change its name, another company must not carry on business in the United Kingdom under the name that the first company was directed or ordered to change if there is a person who has, or has had, a relevant relationship with both companies.

(2) Subsection (1) does not prevent the use by a company of a name if—

(a) it is registered under this Act by that name,

(b) the period for complying with the direction or order has not yet expired, or

(c) the direction was given, or the order was made, before section 26 of the Economic Crime and Corporate Transparency Act 2023 came fully into force.

(3) For the purposes of subsection (1) it is irrelevant whether the person has, or has had, a relevant relationship with both companies at the same time.

(4) For the purposes of this section a person has a “relevant relationship” with a company if the person is—

(a) an officer, or

(b) a member or former member.

(5) If a company uses a name in contravention of this section an offence is committed by—

(a) the company, and

(b) every officer of the company who is in default.

(6) A person guilty of an offence under this section is liable on summary conviction to a fine not exceeding level 3 on the standard scale and, for continued contravention, a daily default fine not exceeding one-tenth of level 3 on the standard scale.

(7) In this section—

“company” includes an overseas company;

“relevant direction” means a direction under section 67, 75, 76A or 76B, other than a direction under section 76B(1)(b) given on the basis that, at the time at which a company’s name was registered, the Secretary of State had proper grounds for forming the opinion mentioned in section 57A.

Supplementary

Savings for existing lawful business names

1199

(1) This section has effect in relation to—

sections 1192 to 1196 (sensitive words or expressions), and

section 1197 (inappropriate indication of company type or legal form).

(2) Those sections do not apply to the carrying on of a business by a person who—

(a) carried on the business immediately before the date on which this Chapter came into force, and

(b) continues to carry it on under the name that immediately before that date was its lawful business name.

(3) Where—

(a) a business is transferred to a person on or after the date on which this Chapter came into force, and

(b) that person carries on the business under the name that was its lawful business name immediately before the transfer,

those sections do not apply in relation to the carrying on of the business under that name during the period of twelve months beginning with the date of the transfer.

(4) In this section “lawful business name”, in relation to a business, means a name under which the business was carried on without contravening—

(a) section 2(1) of the Business Names Act 1985 (c. 7) or Article 4(1) of the Business Names (Northern Ireland) Order 1986 (S.I. 1986/1033 N.I. 7)), or

(b) after this Chapter has come into force, the provisions of this Chapter.

Exceptions based on national security etc

1199A

(1) The Secretary of State may, by written notice given to a person, provide that a prohibition imposed by this Chapter does not apply in relation to the carrying on of a business by that person under a name specified in the notice, if satisfied that to do so is necessary—

(a) in the interests of national security, or

(b) for the purposes of preventing or detecting serious crime.

(2) For the purposes of subsection (1)(b)—

(a) “crime” means conduct which—

(i) constitutes a criminal offence, or

(ii) is, or corresponds to, any conduct which, if it all took place in any one part of the United Kingdom, would constitute a criminal offence, and

(b) crime is “serious” if—

(i) the offence which is or would be constituted by the conduct is an offence for which the maximum sentence (in any part of the United Kingdom) is imprisonment for 3 years or more, or

(ii) the conduct involves the use of violence, results in substantial financial gain or is conduct by a large number of persons in pursuit of a common purpose.

Chapter 2 — Disclosure required in case of individual or partnership

Introductory

Application of this Chapter

1200

(1) This Chapter applies to an individual or partnership carrying on business in the United Kingdom under a business name.

References in this Chapter to “a person to whom this Chapter applies” are to such an individual or partnership.

(2) For the purposes of this Chapter a “business name” means a name other than—

(a) in the case of an individual, his surname without any addition other than a permitted addition;

(b) in the case of a partnership—

(i) the surnames of all partners who are individuals, and

(ii) the corporate names of all partners who are bodies corporate,

without any addition other than a permitted addition.

(3) The following are the permitted additions—

(a) in the case of an individual, his forename or initial;

(b) in the case of a partnership—

(i) the forenames of individual partners or the initials of those forenames, or

(ii) where two or more individual partners have the same surname, the addition of “s” at the end of that surname;

(c) in either case, an addition merely indicating that the business is carried on in succession to a former owner of the business.

Information required to be disclosed

1201

(1) The “information required by this Chapter” is—

(a) in the case of an individual, the individual's name;

(b) in the case of a partnership, the name of each member of the partnership;

and, in relation to each person so named, an address at which service of any document relating in any way to the business will be effective.

(2) If the individual or partnership has a place of business in the United Kingdom, the address must be in the United Kingdom.

(3) If the individual or partnership does not have a place of business in the United Kingdom, the address must be an address at which service of documents can be effected by physical delivery and the delivery of documents is capable of being recorded by the obtaining of an acknowledgement of delivery.

Disclosure requirements

Disclosure required: business documents etc

1202

(1) A person to whom this Chapter applies must state the information required by this Chapter, in legible characters, on all—

(a) business letters,

(b) written orders for goods or services to be supplied to the business,

(d) written demands for payment of debts arising in the course of the business.

This subsection has effect subject to section 1203 (exemption for large partnerships if certain conditions met).

(2) A person to whom this Chapter applies must secure that the information required by this Chapter is immediately given, by written notice, to any person with whom anything is done or discussed in the course of the business and who asks for that information.

(3) The Secretary of State may by regulations require that such notices be given in a specified form.

(4) Regulations under this section are subject to negative resolution procedure.

Exemption for large partnerships if certain conditions met

1203

(1) Section 1202(1) (disclosure required in business documents) does not apply in relation to a document issued by a partnership of more than 20 persons if the following conditions are met.

(2) The conditions are that—

(a) the partnership maintains at its principal place of business a list of the names of all the partners,

(b) no partner's name appears in the document, except in the text or as a signatory, and

(c) the document states in legible characters the address of the partnership's principal place of business and that the list of the partners' names is open to inspection there.

(3) Where a partnership maintains a list of the partners' names for the purposes of this section, any person may inspect the list during office hours.

(4) Where an inspection required by a person in accordance with this section is refused, an offence is committed by any member of the partnership concerned who without reasonable excuse refused the inspection or permitted it to be refused.

(5) A person guilty of an offence under subsection (4) is liable on summary conviction to a fine not exceeding level 3 on the standard scale and, for continued contravention, a daily default fine not exceeding one-tenth of level 3 on the standard scale.

Disclosure required: business premises

1204

(1) A person to whom this Chapter applies must, in any premises—

(a) where the business is carried on, and

(b) to which customers of the business or suppliers of goods or services to the business have access,

display in a prominent position, so that it may easily be read by such customers or suppliers, a notice containing the information required by this Chapter.

(2) The Secretary of State may by regulations require that such notices be displayed in a specified form.

(3) Regulations under this section are subject to negative resolution procedure.

Consequences of failure to make required disclosure

Criminal consequences of failure to make required disclosure

1205

(1) A person who without reasonable excuse fails to comply with the requirements of—

section 1202 (disclosure required: business documents etc), or

section 1204 (disclosure required: business premises),

commits an offence.

(2) Where an offence under this section is committed by a body corporate, an offence is also committed by every officer of the body who is in default.

(3) A person guilty of an offence under this section is liable on summary conviction to a fine not exceeding level 3 on the standard scale and, for continued contravention, a daily default fine not exceeding one-tenth of level 3 on the standard scale.

(4) References in this section to the requirements of section 1202 or 1204 include the requirements of regulations under that section.

Civil consequences of failure to make required disclosure

1206

(1) This section applies to any legal proceedings brought by a person to whom this Chapter applies to enforce a right arising out of a contract made in the course of a business in respect of which he was, at the time the contract was made, in breach of section 1202(1) or (2) (disclosure in business documents etc) or section 1204(1) (disclosure at business premises).

(2) The proceedings shall be dismissed if the defendant (in Scotland, the defender) to the proceedings shows—

(a) that he has a claim against the claimant (pursuer) arising out of the contract that he has been unable to pursue by reason of the latter's breach of the requirements of this Chapter, or

(b) that he has suffered some financial loss in connection with the contract by reason of the claimant's (pursuer's) breach of those requirements,

unless the court before which the proceedings are brought is satisfied that it is just and equitable to permit the proceedings to continue.

(3) References in this section to the requirements of this Chapter include the requirements of regulations under this Chapter.

(4) This section does not affect the right of any person to enforce such rights as he may have against another person in any proceedings brought by that person.

Chapter 3 — Supplementary

Application of general provisions about offences

1207

The provisions of sections 1121 to 1123 (liability of officer in default) and 1125 to 1131 (general provisions about offences) apply in relation to offences under this Part as in relation to offences under the Companies Acts.

Interpretation

1208

In this Part—

“business” includes a profession;

“initial” includes any recognised abbreviation of a name;

“partnership” means—a partnership within the Partnership Act 1890 (c. 39), ora limited partnership registered under the Limited Partnerships Act 1907 (c. 24),or a firm or entity of a similar character formed under the law of a country or territory outside the United Kingdom;

“surname”, in relation to a peer or person usually known by a British title different from his surname, means the title by which he is known.

Part 42 — Statutory Auditors

Chapter 1 — Introductory

Main purposes of Part

1209

The main purposes of this Part are—

(a) to secure that only persons who are properly supervised and appropriately qualified are appointed as statutory auditors, and

(b) to secure that audits by persons so appointed are carried out properly, with integrity and with a proper degree of independence.

Meaning of “statutory auditor” etc

1210

(1) In this Part “statutory auditor” means—

(a) a person appointed as auditor under Part 16 of this Act,

(b) a person appointed as auditor under section 77 of or Schedule 11 to the Building Societies Act 1986 (c. 53),

(c) a person appointed as auditor of a friendly society under section 72 of or Schedule 14 to the Friendly Societies Act 1992, where that society is—

(i) an insurer, or

(ii) an issuer whose transferable securities are admitted to trading on a UK regulated market;

(d) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

(e) a person appointed as auditor for the purposes of regulation 5 of the Insurance Accounts Directive (Lloyd's Syndicate and Aggregate Accounts) Regulations 2008 or appointed to report on the “aggregate accounts” within the meaning of those Regulations,

(f) a person appointed as auditor of an insurance undertaking for the purposes of the Insurance Accounts Directive (Miscellaneous Insurance Undertakings) Regulations 2008,

(g) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

(h) a person appointed as auditor of a prescribed person under a prescribed enactment authorising or requiring the appointment;

and the expressions “statutory audit” and “statutory audit work” are to be construed accordingly.

(2) In this Part “audited person” means the person in respect of whom a statutory audit is conducted.

(3) In subsection (1)—

“friendly society” means a friendly society within the meaning of the Friendly Societies Act 1992 (c. 40);

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

“insurer” means a person who would be an insurance undertaking, as defined in Article 2(1) of Council Directive 91/674/EEC of 19 December 1991 of the European Parliament and of the Council on the annual accounts and consolidated accounts of insurance undertakings as that Article had effect immediately before IP completion day, were the United Kingdom a member State;

“issuer” has the same meaning as in Part 6 of the Financial Services and Markets Act 2000 (see section 102A(6));

“prescribed” means prescribed, or of a description prescribed, by order made by the Secretary of State for the purposes of subsection (1)(h).

(4) An order under this section is subject to negative resolution procedure.

Eligibility for appointment as a statutory auditor: overview

1211

A person is eligible for appointment as a statutory auditor only if the person is so eligible—

(a) by virtue of Chapter 2 (individuals and firms), or

(b) by virtue of Chapter 3 (Comptroller and Auditor General, etc).

Chapter 2 — Individuals and firms

Eligibility for appointment

Individuals and firms: eligibility for appointment as a statutory auditor

1212

(1) An individual or firm is eligible for appointment as a statutory auditor if the individual or firm—

(a) is a member of a recognised supervisory body, and

(b) is eligible for appointment under the rules of that body.

(2) In the cases to which section 1222 applies (individuals retaining only 1967 Act authorisation) a person's eligibility for appointment as a statutory auditor is restricted as mentioned in that section.

Effect of ineligibility

1213

(1) No person may act as statutory auditor of an audited person if he is ineligible for appointment as a statutory auditor.

(2) If at any time during his term of office a statutory auditor becomes ineligible for appointment as a statutory auditor, 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 becoming ineligible for appointment.

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

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

(b) he fails to give the notice mentioned in paragraph (b) of subsection (2) in accordance with that subsection.

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

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

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

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

(a) he has been convicted of an offence under subsection (3)(a) or this subsection, and

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

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

(a) he has been convicted of an offence under subsection (3)(b) or this subsection, and

(b) he continues, after the conviction, to fail to give the notice mentioned in subsection (2)(b).

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

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

(b) on summary conviction, to a fine not exceeding one-tenth of the statutory maximumone-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.

(8) 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, ineligible for appointment as a statutory auditor.

Independence requirement

1214

(1) A person may not act as statutory auditor of an audited person if one or more of subsections (2), (3) and (4) apply to him.

(2) This subsection applies if the person is—

(a) an officer or employee of the audited person, or

(b) a partner or employee of such a person, or a partnership of which such a person is a partner.

(3) This subsection applies if the person is—

(a) an officer or employee of an associated undertaking of the audited person, or

(b) a partner or employee of such a person, or a partnership of which such a person is a partner.

(4) This subsection applies if there exists, between—

(a) the person or an associate of his, and

(b) the audited person or an associated undertaking of the audited person,

a connection of any such description as may be specified by regulations made by the Secretary of State.

(5) An auditor of an audited person is not to be regarded as an officer or employee of the person for the purposes of subsections (2) and (3).

(6) In this section “associated undertaking”, in relation to an audited person, means—

(a) a parent undertaking or subsidiary undertaking of the audited person, or

(b) a subsidiary undertaking of a parent undertaking of the audited person.

(7) Regulations under subsection (4) are subject to negative resolution procedure.

Effect of lack of independence

1215

(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 one-tenth of the statutory maximumone-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).

Effect of appointment of a partnership

1216

(1) This section applies where a partnership constituted under the law of—

(a) England and Wales,

(b) Northern Ireland, or

is by virtue of this Chapter appointed as statutory auditor of an audited person.

(2) Unless a contrary intention appears, the appointment is an appointment of the partnership as such and not of the partners.

(3) Where the partnership ceases, the appointment is to be treated as extending to—

(a) any appropriate partnership which succeeds to the practice of that partnership, or

(b) any other appropriate person who succeeds to that practice having previously carried it on in partnership.

(4) For the purposes of subsection (3)—

(a) a partnership is to be regarded as succeeding to the practice of another partnership only if the members of the successor partnership are substantially the same as those of the former partnership, and

(b) a partnership or other person is to be regarded as succeeding to the practice of a partnership only if it or he succeeds to the whole or substantially the whole of the business of the former partnership.

(5) Where the partnership ceases and the appointment is not treated under subsection (3) as extending to any partnership or other person, the appointment may with the consent of the audited person be treated as extending to an appropriate partnership, or other appropriate person, who succeeds to—

(a) the business of the former partnership, or

(b) such part of it as is agreed by the audited person is to be treated as comprising the appointment.

(6) For the purposes of this section, a partnership or other person is “appropriate” if it or he—

(a) is eligible for appointment as a statutory auditor by virtue of this Chapter, and

(b) is not prohibited by section 1214(1) from acting as statutory auditor of the audited person.

Supervisory bodies

1217

(1) In this Part a “supervisory body” means a body established in the United Kingdom (whether a body corporate or an unincorporated association) which maintains and enforces rules as to—

(a) the eligibility of persons for appointment as a statutory auditor, and

(b) the conduct of statutory audit work,

which are binding on persons seeking appointment or acting as a statutory auditor . . . because they are members of that body . . . .

(1A) The rules referred to in paragraphs 9(1A) and 10C(3) (bar on appointment as director or other officer), paragraph 9(3)(b) (confidentiality of information) and paragraph 12(3)(b)(v) (temporary prohibition from exercising functions in a firm) of Schedule 10 must also be binding on persons who—

(a) have sought appointment or acted as a statutory auditor, and

(b) have been members of the body at any time after the commencement of this Part.

(2) In this Part references to the members of a supervisory body are to the persons who, whether or not members of the body, are subject to its rules in seeking appointment or acting as a statutory auditor.

(3) In this Part references to the rules of a supervisory body are to the rules (whether or not laid down by the body itself) which the body or the competent authority has power to enforce and which are relevant for the purposes of this Part.

This includes rules relating to the admission or expulsion of members of the body, so far as relevant for the purposes of this Part.

(4) Schedule 10 has effect with respect to the recognition of supervisory bodies for the purposes of this Part.

Exemption from liability for damages

1218

(1) No person within subsection (2) is to be liable in damages for anything done or omitted in the discharge or purported discharge of functions to which this subsection applies.

(2) The persons within this subsection are—

(a) any recognised supervisory body,

(b) any officer or employee of a recognised supervisory body, and

(3) Subsection (1) applies to the functions of a recognised supervisory body so far as relating to, or to matters arising out of, any of the following—

(a) rules, practices, powers and arrangements of the body to which the requirements of Part 2 of Schedule 10 apply;

(b) the obligations with which paragraph 20 of that Schedule requires the body to comply;

(d) the obligations imposed on the body by or by virtue of this Part or by or by virtue of the Statutory Auditors and Third Country Auditors Regulations 2016;

(e) the obligations imposed on the body by or by virtue of the Audit Regulation.

(4) The reference in subsection (3)(c) to guidance issued by a recognised supervisory body is a reference to any guidance or recommendation which is—

(a) issued or made by it to all or any class of its members or persons seeking to become members, and

(b) relevant for the purposes of this Part , the Statutory Auditors and Third Country Auditors Regulations 2016 or the Audit Regulation,

including any guidance or recommendation relating to the admission or expulsion of members of the body, so far as relevant for the purposes of this Part , the Statutory Auditors and Third Country Auditors Regulations 2016 or the Audit Regulation.

(5) Subsection (1) does not apply—

(a) if the act or omission is shown to have been in bad faith, or

(b) so as to prevent an award of damages in respect of the act or omission on the ground that it was unlawful as a result of section 6(1) of the Human Rights Act 1998 (c. 42) (acts of public authorities incompatible with Convention rights).

Professional qualifications

Appropriate qualifications

1219

(1) A person holds an appropriate qualification for the purposes of this Chapter if and only if—

(a) he holds a recognised professional qualification obtained in the United Kingdom,

(b) immediately before the commencement of this Chapter, he—

(i) held an appropriate qualification for the purposes of Part 2 of the Companies Act 1989 (c. 40) (eligibility for appointment as company auditor) by virtue of section 31(1)(a) or (c) of that Act, or

(ii) was treated as holding an appropriate qualification for those purposes by virtue of section 31(2), (3) or (4) of that Act,

(i) held an appropriate qualification for the purposes of Part III of the Companies (Northern Ireland) Order 1990 (S.I. 1990/593 (N.I. 5)) by virtue of Article 34(1)(a) or (c) of that Order, or

(ii) was treated as holding an appropriate qualification for those purposes by virtue of Article 34(2), (3) or (4) of that Order,

(d) he is within subsection (2), or

(e) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

(f) subject to any direction under section 1221(5), he is regarded for the purposes of this Chapter as holding an approved third country qualification.

(2) A person is within this subsection if—

(a) before 1st January 1990, he began a course of study or practical training leading to a professional qualification in accountancy offered by a body established in the United Kingdom,

(b) he obtained that qualification on or after 1st January 1990 and before 1st January 1996, and

(c) the Secretary of State approved his qualification before 1st October 2018 as an appropriate qualification for the purposes of this Chapter.

(3) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Qualifying bodies and recognised professional qualifications

1220

(1) In this Part a “qualifying body” means a body established in the United Kingdom (whether a body corporate or an unincorporated association) which offers a professional qualification in accountancy.

(2) In this Part references to the rules of a qualifying body are to the rules (whether or not laid down by the body itself) which the body has power to enforce and which are relevant for the purposes of this Part.

This includes, so far as so relevant, rules relating to—

(a) admission to or expulsion from a course of study leading to a qualification,

(b) the award or deprivation of a qualification, or

(3) Schedule 11 has effect with respect to the recognition for the purposes of this Part of a professional qualification offered by a qualifying body.

Approval of third country qualifications

1221

(1) The Secretary of State may declare that the following are to be regarded for the purposes of this Chapter as holding an approved third country qualification—

(a) persons who are qualified to audit accounts under the law of a specified third country, or

(b) persons who hold a specified professional qualification in accountancy obtained in a specified third country.

(1A) A declaration under subsection (1)(a) or (b) must contain provision to the effect that a person is not to be regarded as holding an approved third country qualification for the purposes of this Chapter unless the person—

(a) already holds a professional qualification which—

(i) covers subjects and skills which are the same or substantially the same as the subjects and skills that are covered by a recognised professional qualification, where the knowledge of those subjects and skills is essential for the pursuit of the profession of statutory auditor, and

(ii) demonstrates knowledge of those subjects and skills to the same or substantially the same standard as that demonstrated by the recognised professional qualification, or

(b) holds a professional qualification which does not comply with paragraph (a) and has met whichever of the requirements of subsection (1B) as is specified in the declaration.

(1B) The declaration must specify that the condition in subsection (1A)(b) is satisfied in one of the following ways—

(a) only by passing an aptitude test in accordance with subsection (7A),

(b) only by completing an adaptation period in accordance with subsections (7C) and (7D), or

(c) either by passing an aptitude test in accordance with subsection (7A) or by completing an adaptation period in accordance with subsections (7C) and (7D), according to the choice of the person.

(2) A declaration under subsection (1)(b) may be expressed to be subject to the satisfaction of any specified requirement or requirements.

(3) The Secretary of State may make a declaration under subsection (1) only if he is satisfied that—

(a) in the case of a declaration under subsection (1)(a), the fact that the persons in question are qualified to audit accounts under the law of the specified third country, taken with any requirement or requirements to be specified under subsection (1A), or

(b) in the case of a declaration under subsection (1)(b), the specified professional qualification taken with any requirement or requirements to be specified under subsections (1A) or (2),

affords an assurance of professional competence equivalent to that afforded by a recognised professional qualification.

(4) The Secretary of State may make a declaration under subsection (1) only if he is satisfied that the treatment that the persons who are the subject of the declaration will receive as a result of it is comparable to the treatment which is, or is likely to be, afforded in the specified third country or a part of it to—

(a) in the case of a declaration under subsection (1)(a), some or all persons who are eligible to be appointed as a statutory auditor, and

(b) in the case of a declaration under subsection (1)(b), some or all persons who hold a corresponding recognised professional qualification.

(5) The Secretary of State may direct that persons holding an approved third country qualification are not to be treated as holding an appropriate qualification for the purposes of this Chapter unless they hold such additional educational qualifications as the Secretary of State may specify for the purpose of ensuring that such persons have an adequate knowledge of the law and practice in the United Kingdom relevant to the audit of accounts.

(6) The Secretary of State may give different directions in relation to different approved third country qualifications.

(7) The Secretary of State may, if he thinks fit, having regard to the considerations mentioned in subsections (3) and (4), withdraw a declaration under subsection (1) in relation to—

(a) persons becoming qualified to audit accounts under the law of the specified third country after such date as he may specify, or

(b) persons obtaining the specified professional qualification after such date as he may specify.

(7A) An aptitude test required for the purposes of subsection (1B) —

(a) must test the person’s knowledge of required subjects and skills,

(b) may test the person's knowledge of rules of professional conduct;

(7AA) For the purposes of subsection (7A), a subject or skill is a required subject or skill if it is covered by a recognised professional qualification and knowledge of it is essential for the pursuit of the profession of statutory auditor, but—

(a) the professional qualification already held by the person (“the existing qualification”) does not cover the same or substantially the same subject or skill, or

(b) the existing qualification does not demonstrate knowledge of that subject or skill to the same or substantially the same standard as that demonstrated by the recognised professional qualification.

(7B) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

(7C) An adaptation period is a period, not exceeding three years, in which the person (“the applicant”) pursues the profession of statutory auditor under the supervision of another person who holds an appropriate qualification, subject to an assessment (“the ability assessment”) of the applicant’s ability to pursue the profession of statutory auditor in the United Kingdom.

(7D) The adaptation period must be completed, and the ability assessment must be carried out, in accordance with the rules and practices of a recognised supervisory body (see paragraph 7A of Schedule 10).

(8) The Secretary of State may, if he thinks fit, having regard to the considerations mentioned in subsections (3) and (4), vary or revoke a requirement specified under subsection (2) from such date as he may specify.

(9) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Eligibility of individuals retaining only 1967 Act authorisation

1222

(1) A person whose only appropriate qualification is based on his retention of an authorisation originally granted by the Board of Trade or the Secretary of State under section 13(1) of the Companies Act 1967 (c. 81) is eligible only for appointment as auditor of an unquoted company.

(2) A company is “unquoted” if, at the time of the person's appointment, neither the company, nor any parent undertaking of which it is a subsidiary undertaking, is a quoted company within the meaning of section 385(2).

(3) References to a person eligible for appointment as a statutory auditor by virtue of this Part in enactments relating to eligibility for appointment as auditor of a person other than a company do not include a person to whom this section applies.

Information

Matters to be notified to the Secretary of State

1223

(1) The Secretary of State may require a recognised supervisory body or a recognised qualifying body—

(a) to notify him immediately of the occurrence of such events as he may specify in writing and to give him such information in respect of those events as is so specified;

(b) to give him, at such times or in respect of such periods as he may specify in writing, such information as is so specified.

(2) The notices and information required to be given must be such as the Secretary of State may reasonably require for the exercise of his functions under this Part.

(3) The Secretary of State may require information given under this section to be given in a specified form or verified in a specified manner.

(4) Any notice or information required to be given under this section must be given in writing unless the Secretary of State specifies or approves some other manner.

Matters to be notified to the competent authority

1223ZA

(1) The competent authority may require a recognised supervisory body—

(a) to notify the competent authority immediately of the occurrence of such events as the competent authority may specify in writing and to give the competent authority such information in respect of those events as is so specified;

(b) to give the competent authority, at such times or in respect of such periods as the competent authority may specify in writing, such information as is so specified.

(2) The notices and information required to be given must be such as the competent authority may reasonably require for the exercise of its functions under this Part, the Statutory Auditors and Third Country Auditors Regulations 2016 or the Audit Regulation .

(3) The competent authority may require information given under this section to be given in a specified form or verified in a specified manner.

(4) Any notice or information required to be given under this section must be given in writing unless the competent authority specifies or approves some other manner.

Notification of matters relevant to approved third country competent authorities

1223A

(1) A recognised supervisory body must notify the Secretary of State—

(a) if a notifiable person becomes eligible for appointment as a statutory auditor, unless the notifiable person is an individual;

(b) if a notifiable person’s eligibility for appointment as a statutory auditor is withdrawn;

(2) A recognised supervisory body must also notify the Secretary of State of any reasonable grounds it has for suspecting that—

(a) a person has contravened the law of the United Kingdom, or an equivalent third country or transitional third country, and

(b) the act or omission constituting that contravention took place on the territory of an equivalent third country or transitional third country.

(3) In this section “ notifiable person ” means a member of the recognised supervisory body in question—

(a) who is also a third country auditor that has been approved by an approved third country competent authority; and

(b) in respect of whom the approved third country competent authority is not the recognised supervisory body itself.

The Secretary of State's power to call for information

1224

(1) The Secretary of State may by notice in writing require a person within subsection (2) to give him such information as he may reasonably require for the exercise of his functions under this Part.

(2) The persons within this subsection are—

(a) any recognised supervisory body,

(b) any recognised qualifying body, and

(3) The Secretary of State may require that any information which he requires under this section is to be given within such reasonable time and verified in such manner as he may specify.

The competent authority’s power to call for information

1224ZA

(1) The competent authority may by notice in writing require any recognised supervisory body to give the competent authority such information as it may reasonably require for the exercise of its functions under this Part, the Statutory Auditors and Third Country Auditors Regulations 2016 or the Audit Regulation.

(2) The competent authority may require that any information which it requires under this section is to be given within such reasonable time and verified in such manner as it may specify.

Restrictions on disclosure

1224A

(1) This section applies to information (in whatever form)—

(a) relating to the private affairs of an individual, or

(b) relating to any particular business,

that is provided to a body to which this section applies in connection with the exercise of its functions under this Part sections 522 to 524 (notification to appropriate audit authority of resignation or removal of auditor), the Statutory Auditors and Third Country Auditors Regulations 2016 or the Audit Regulation

(2) This section applies to—

(a) a recognised supervisory body,

(b) a recognised qualifying body,

(d) the Independent Supervisor,

(e) the Secretary of State, and

(f) a body designated by the Secretary of State under section 1252 (delegation of the Secretary of State's functions).

(3) No such information may, during the lifetime of the individual or so long as the business continues to be carried on, be disclosed without the consent of that individual or (as the case may be) the person for the time being carrying on that business.

(4) Subsection (3) does not apply to any disclosure of information that—

(a) is made for the purpose of facilitating the carrying out by the body of any of its functions,

(b) is made to a person specified in Part 1 of Schedule 11A,

(d) is made in accordance with Part 3 of that Schedule.

(5) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

(6) This section does not prohibit the disclosure of information if the information is or has been available to the public from any other source.

(7) Nothing in this section authorises the making of a disclosure in contravention of the data protection legislation.

Offence of disclosure in contravention of section 1224A

1224B

(1) A person who discloses information in contravention of section 1224A (restrictions on disclosure) is guilty of an offence, unless—

(a) he did not know, and had no reason to suspect, that the information had been provided as mentioned in section 1224A(1), or

(b) he took all reasonable steps and exercised all due diligence to avoid the commission of the offence.

(2) A person guilty of an offence under this section is liable—

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

(b) on summary conviction—

(i) in Scotland, to imprisonment for a term not exceeding 12 months or to a fine not exceeding the statutory maximum, or to both;

(ii) in England and Wales or Northern Ireland, to imprisonment for a term not exceeding three months or to a fine not exceeding the statutory maximum, or to both.

Enforcement

Enforcement: general

1225

(1) This section applies if at any time it appears to the Secretary of State—

(a) in the case of a recognised supervisory body, that any requirement of Part 2 or 3 of Schedule 10 is not satisfied,

(b) in the case of a recognised professional qualification offered by a recognised qualifying body, that any requirement of Part 2 of Schedule 11 is not satisfied, ...

(c) that a recognised supervisory body or a recognised qualifying body has not complied with an obligation imposed on it by or by virtue of this Part (other than an obligation to pay a financial penalty under section 1225D) or

(d) that a recognised supervisory body has not complied with an obligation imposed on it by or by virtue of the Statutory Auditors and Third Country Auditors Regulations 2016.

(2) The Secretary of State may do any one or more of the following—

(a) give a direction to the body under section 1225A;

(b) make an application to the court in respect of the body under section 1225C;

(3) Subsection (2) is without prejudice to the powers of the Secretary of State under paragraph 3 of Schedule 10 and paragraph 3 of Schedule 11 (revocation of recognition orders) or the powers of the competent authority under regulation 3 of the Statutory Auditors and Third Country Auditors Regulations 2016.

Directions: general

1225A

(1) A direction under this section is one directing a body to take such steps as the Secretary of State considers will—

(a) secure that the requirement in question is satisfied or the obligation in question is complied with, or

(b) mitigate the effect, or prevent the recurrence, of the failure to satisfy the requirement or comply with the obligation.

(2) A direction under this section—

(a) may only require a body to take steps which it has power to take;

(b) may require a body to refrain from taking a particular course of action.

(3) The power to give a direction under this section is subject to any provision made by or under any other enactment.

(4) The Secretary of State may take such steps as the Secretary of State considers appropriate to monitor the extent to which a direction under this section is being, or has been, complied with.

Directions: supplementary

1225B

(1) Before giving a direction to a body under section 1225A, the Secretary of State must give the body a notice (a “notice of proposed direction”) accompanied by a copy of the proposed direction.

(2) A notice of proposed direction must—

(a) state that the Secretary of State proposes to give the body a direction in the form of the accompanying draft,

(b) identify the requirement or obligation in question and state why it appears to the Secretary of State that the requirement is not satisfied or the obligation has not been complied with,

(3) The period specified under subsection (2)(c)—

(a) must begin with the date on which the notice of proposed direction is given to the body, and

(b) must not be less than 14 days.

(4) Written representations made by the body within the period specified under subsection (2)(c) must be considered by the Secretary of State.

(5) After considering any such representations or, in their absence, on the expiry of the period specified under subsection (2)(c), the Secretary of State must decide whether to give the body the proposed direction.

(6) The Secretary of State must give notice of the decision (a “direction decision notice”) to the body.

(7) Where the Secretary of State decides to give the proposed direction, the direction decision notice must—

(a) contain the direction,

(b) state the time at which the direction is to take effect, and

(8) Where the Secretary of State decides to give the proposed direction, the Secretary of State must publish the direction decision notice in such manner as the Secretary of State considers appropriate for bringing the direction to the attention of persons likely to be affected.

(9) The Secretary of State may revoke a direction given to a body under section 1225A and, where doing so, must—

(a) give the body notice of the revocation, and

(b) publish the notice in the same manner as the direction decision notice was published.

Compliance orders

1225C

(1) If on an application under this section in respect of a body, the court decides that a requirement is not satisfied or an obligation has not been complied with, the court may, subject to subsection (2), order the body to take such steps as it considers will secure that the requirement is satisfied or the obligation is complied with.

(2) Where the obligation is an obligation to comply with a direction under section 1225A, the court may not order compliance with the direction unless it also decides that—

(a) the requirement in respect of which the direction was given is not satisfied, or

(b) the obligation in respect of which the direction was given has not been complied with.

(3) In this section, “ the court ” means the High Court or, in Scotland, the Court of Session.

Financial penalties: general

1225D

(1) A financial penalty imposed on a body under this section is a financial penalty of such amount as the Secretary of State considers appropriate, subject to subsection (2).

(2) In deciding what amount is appropriate the Secretary of State—

(a) must have regard to the nature of the requirement which is not satisfied or the obligation which has not been complied with; and

(b) must not take into account the Secretary of State's costs in discharging functions under this Part.

(3) A financial penalty under this section is payable to the Secretary of State.

(4) In sections 1225E to 1225G, references to a penalty are to a financial penalty under this section.

Financial penalties: supplementary

1225E

(1) Before imposing a penalty on a body, the Secretary of State must give the body a notice (a “notice of proposed penalty”)—

(a) stating that the Secretary of State proposes to impose a penalty and the amount of the penalty proposed,

(b) identifying the requirement or obligation in question and stating why it appears to the Secretary of State that the requirement is not satisfied or the obligation has not been complied with, and

(2) The period specified under subsection (1)(c)—

(a) must begin with the date on which the notice of proposed penalty is given to the body, and

(b) must not be less than 21 days.

(3) Written representations made by the body before the end of the period specified under subsection (1)(c) must be considered by the Secretary of State.

(4) After considering any such representations or, in their absence, on the expiry of the period specified under subsection (1)(c), the Secretary of State must decide—

(a) whether to impose a penalty, and

(b) where the Secretary of State decides to do so, whether to reduce the proposed amount of the penalty.

(5) The Secretary of State must give notice of the decision (a “penalty decision notice”) to the body.

(6) Where the Secretary of State decides to impose a penalty, the penalty decision notice must—

(a) state that the Secretary of State has imposed a penalty on the body and its amount,

(b) identify the requirement or obligation in question and state—

(i) why it appears to the Secretary of State that the requirement is not satisfied or the obligation has not been complied with, or

(ii) where, by that time, the requirement is satisfied or the obligation has been complied with, why it appeared to the Secretary of State when giving the notice of proposed penalty that the requirement was not satisfied or the obligation had not been complied with, and

(7) The time specified under subsection (6)(c) must be at least 3 months after the date on which the penalty decision notice is given to the body.

(8) Where the Secretary of State decides to impose a penalty, the Secretary of State must publish the penalty decision notice and must do so in such manner as the Secretary of State considers appropriate for bringing the penalty to the attention of persons likely to be affected.

(9) The Secretary of State may rescind a penalty imposed on a body under section 1225D and, where doing so, must—

(a) give the body notice of the rescission, and

(b) publish the notice in the same manner as the penalty decision notice was published.

Appeals against financial penalties

1225F

(1) A body on which a penalty is imposed may appeal to the court on one or more of the appeal grounds.

(2) The appeal grounds are—

(a) that, before the giving of the notice under section 1225E(1), the requirement in respect of which the penalty was imposed was satisfied or the obligation in respect of which the penalty was imposed had been complied with;

(b) that, where the penalty was imposed in respect of a failure to comply with a direction under section 1225A, before the giving of the notice under section 1225B(6), the requirement in respect of which the direction was given was satisfied or the obligation in respect of which the direction was given had been complied with;

(c) that any of the requirements of section 1225E have not been complied with in relation to the imposition of the penalty and the interests of the body have been substantially prejudiced by the non-compliance;

(d) that the amount of the penalty is unreasonable;

(e) that it was unreasonable of the Secretary of State to require the penalty imposed to be paid by the time specified in the notice under section 1225E(5).

(3) An appeal under subsection (1) must be made within the period of 3 months beginning with the day on which the notice under section 1225E(5) is given to the body in respect of the penalty.

(4) On any such appeal, where the court considers it appropriate to do so in all the circumstances of the case and is satisfied of one or more of the appeal grounds, the court may—

(a) quash the penalty,

(b) substitute a penalty of such lesser amount as the court considers appropriate, or

(c) in the case of the appeal ground in subsection (2)(e), substitute a later time for the time specified in the notice under section 1225E(5).

(5) Where the court substitutes a penalty of a lesser amount, it may require the payment of interest on the substituted penalty, accruing from the time specified in the notice under section 1225E(5) or such later time as the court considers just and equitable.

(6) Where the court substitutes a later time for the time specified in the notice under section 1225E(5), it may require the payment of interest on the penalty, accruing from the substituted time or such later time as the court considers just and equitable.

(7) Where the court dismisses the appeal, it may require the payment of interest on the penalty, accruing from the time specified in the notice under section 1225E(5).

(8) Where the court requires the payment of interest under this section, the interest is payable at such rate as the court considers just and equitable.

(9) Except as provided by this section, the validity of a penalty is not to be questioned by any legal proceedings whatever.

(10) In this section “ the court ” means the High Court or, in Scotland, the Court of Session.

Recovery of financial penalties

1225G

(1) If the whole or any part of a penalty is not paid by the time by which it is required to be paid, the unpaid balance from time to time carries interest at the rate for the time being specified in section 17 of the Judgments Act 1838 (c 110) (unless a different rate is specified by the court under section 1225F(8)).

(2) If an appeal is made under section 1225F in relation to a penalty, the penalty is not required to be paid until the appeal has been determined or withdrawn.

(3) Subsection (2) does not prevent the court from specifying that interest is to accrue from an earlier date under section 1225F.

(4) Where a penalty, or any portion of it, has not been paid by the time when it is required to be paid and—

(a) no appeal relating to the penalty has been made under section 1225F during the period within which such an appeal can be made, or

(b) an appeal has been made under that section and has been determined or withdrawn,

the Secretary of State may recover from the body, as a debt due to the Secretary of State, any of the penalty and any interest which has not been paid.

Chapter 3 — Auditors General

Eligibility for appointment

Auditors General: eligibility for appointment as a statutory auditor

1226

(1) In this Part “Auditor General” means—

(a) the Comptroller and Auditor General,

(b) the Auditor General for Scotland,

(d) the Comptroller and Auditor General for Northern Ireland.

(2) An Auditor General is eligible for appointment as a statutory auditor.

(3) Subsection (2) is subject to any suspension notice having effect under section 1234 (notices suspending eligibility for appointment as a statutory auditor).

Conduct of audits

Individuals responsible for audit work on behalf of Auditors General

1227

An Auditor General must secure that each individual responsible for statutory audit work on behalf of that Auditor General is eligible for appointment as a statutory auditor by virtue of Chapter 2.

The Independent Supervisor

Appointment of the Independent Supervisor

1228

(1) The Secretary of State must appoint a body (“the Independent Supervisor”) to discharge the function mentioned in section 1229(1) (“the supervision function”).

(2) An appointment under this section must be made by order.

(3) The order has the effect of making the body appointed under subsection (1) designated under section 5 of the Freedom of Information Act 2000 (c. 36) (further powers to designate public authorities).

(4) A body may be appointed under this section only if it is a body corporate or an unincorporated association which appears to the Secretary of State—

(a) to be willing and able to discharge the supervision function, and

(b) to have arrangements in place relating to the discharge of that function which are such as to be likely to ensure that the conditions in subsection (5) are met.

(5) The conditions are—

(a) that the supervision function will be exercised effectively, and

(b) where the order is to contain any requirements or other provisions specified under subsection (6), that that function will be exercised in accordance with any such requirements or provisions.

(6) An order under this section may contain such requirements or other provisions relating to the exercise of the supervision function by the Independent Supervisor as appear to the Secretary of State to be appropriate.

(7) An order under this section is subject to negative resolution procedure.

Supervision of Auditors General

Supervision of Auditors General by the Independent Supervisor

1229

(1) The Independent Supervisor must supervise the performance by each Auditor General of his functions as a statutory auditor.

(2) The Independent Supervisor must discharge that duty by—

(a) establishing supervision arrangements itself, or

(b) entering into supervision arrangements with one or more recognised supervisory bodies.

(2A) If the Independent Supervisor enters into supervision arrangements with one or more bodies, it must oversee the effective operation of those supervision arrangements.

(3) For this purpose “supervision arrangements” are arrangements established by the Independent Supervisor or entered into by the Independent Supervisor with a body, for the purposes of this section, in accordance with which the Independent Supervisor or the body does . . . the following—

(a) determines standards relating to professional integrity and independence which must be applied by an Auditor General in statutory audit work;

(b) determines technical standards which must be applied by an Auditor General in statutory audit work and the manner in which those standards are to be applied in practice;

(d) investigates any matter arising from the performance by an Auditor General of a statutory audit;

(e) holds disciplinary hearings in respect of an Auditor General which appear to be desirable following the conclusion of such investigations;

(f) decides whether (and, if so, what) disciplinary action should be taken against an Auditor General to whom such a hearing related.

(3A) The requirements of paragraphs 9 to 10C and 12 to 16 of Schedule 10 (requirements for recognition of a supervisory body) apply in relation to supervision arrangements as they apply in relation to the rules, practices and arrangements of supervisory bodies.

(4) The Independent Supervisor may enter into supervision arrangements with a body despite any relationship that may exist between the Independent Supervisor and that body.

(5) The Independent Supervisor must notify each Auditor General in writing of any supervision arrangements that it establishes or enters into under this section.

(5A) The Independent Supervisor must, at least once in every calendar year, deliver to the Secretary of State a summary of the results of any inspections conducted for the purposes of subsection (3)(c).

(6) Supervision arrangements within subsection (3)(f) may, in particular, provide for the payment by an Auditor General of a fine to any personor, in the case of the Auditor General for Wales, for payment by the Wales Audit Office of such a fine.

(7) Any fine received by the Independent Supervisor under supervision arrangements is to be paid into the Consolidated Fund.

Duties of Auditors General in relation to supervision arrangements

1230

(1) Each Auditor General must—

(a) comply with any standards of the kind mentioned in subsection (3)(a) or (b) of section 1229 determined under the supervision arrangements,

(b) take such steps as may be reasonably required of that Auditor General to enable his performance of statutory audits to be monitored by means of inspections carried out under the supervision arrangements, and

(c) comply with any decision of the kind mentioned in subsection (3)(f) of that section made under the supervision arrangements.

(2) Each Auditor General must—

(a) if the Independent Supervisor has established supervision arrangements, pay to the Independent Supervisor;

(b) if the Independent Supervisor has entered into supervision arrangements with a body, pay to that body,

such proportion of the costs incurred by the Independent Supervisor or body for the purposes of the arrangements as the Independent Supervisor may notify to him in writing.

(3) Expenditure under subsection (2) is—

(a) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

(b) in the case of expenditure of the Comptroller and Auditor General for Northern Ireland, to be regarded as expenditure of the Northern Ireland Audit Office for the purposes of Article 6(1) of the Audit (Northern Ireland) Order 1987 (S.I. 1987/460 (N.I. 5)).

(c) in the case of expenditure of the Auditor General for Wales, to be regarded as expenditure of the Wales Audit Office for the purposes of section 20 of the Public Audit (Wales) Act 2013.

(4) In this section “the supervision arrangements” means the arrangements established or entered into under section 1229.

Reporting requirement

Reports by the Independent Supervisor

1231

(1) The Independent Supervisor must, at least once in each calendar year, prepare a report on the discharge of its functions.

(2) The Independent Supervisor must give a copy of each report prepared under subsection (1) to—

(a) the Secretary of State;

(b) the First Minister in Scotland;

(d) The First Minister for Wales.

(3) The Secretary of State must lay before each House of Parliament a copy of each report received by him under subsection (2)(a).

(3A) The First Minister for Wales must lay before the National Assembly for Wales a copy of each report received by him under subsection (2)(d).

(4) In relation to a calendar year during which an appointment of a body as the Independent Supervisor is made or revoked by an order under section 1228, this section applies with such modifications as may be specified in the order.

Information

Matters to be notified to the Independent Supervisor

1232

(1) The Independent Supervisor may require an Auditor General—

(a) to notify the Independent Supervisor immediately of the occurrence of such events as it may specify in writing and to give it such information in respect of those events as is so specified;

(b) to give the Independent Supervisor, at such times or in respect of such periods as it may specify in writing, such information as is so specified.

(2) The notices and information required to be given must be such as the Independent Supervisor may reasonably require for the exercise of the functions conferred on it by or by virtue of this Part.

(3) The Independent Supervisor may require information given under this section to be given in a specified form or verified in a specified manner.

(4) Any notice or information required to be given under this section must be given in writing unless the Independent Supervisor specifies or approves some other manner.

The Independent Supervisor's power to call for information

1233

(1) The Independent Supervisor may by notice in writing require an Auditor General to give it such information as it may reasonably require for the exercise of the functions conferred on it by or by virtue of this Part.

(2) The Independent Supervisor may require that any information which it requires under this section is to be given within such reasonable time and verified in such manner as it may specify.

Enforcement

Suspension notices

1234

(1) The Independent Supervisor may issue—

(a) a notice (a “suspension notice”) suspending an Auditor General's eligibility for appointment as a statutory auditor in relation to all persons, or any specified person or persons, indefinitely or until a date specified in the notice;

(b) a notice amending or revoking a suspension notice previously issued to an Auditor General.

(2) In determining whether it is appropriate to issue a notice under subsection (1), the Independent Supervisor must have regard to—

(a) the Auditor General's performance of the obligations imposed on him by or by virtue of this Part, and

(b) the Auditor General's performance of his functions as a statutory auditor.

(3) A notice under subsection (1) must—

(a) be in writing, and

(b) state the date on which it takes effect (which must be after the period of three months beginning with the date on which it is issued).

(4) Before issuing a notice under subsection (1), the Independent Supervisor must—

(a) give written notice of its intention to do so to the Auditor General, and

(b) publish the notice mentioned in paragraph (a) in such manner as it thinks appropriate for bringing it to the attention of any other persons who are likely to be affected.

(5) A notice under subsection (4) must—

(a) state the reasons for which the Independent Supervisor proposes to act, and

(b) give particulars of the rights conferred by subsection (6).

(6) A person within subsection (7) may, within the period of three months beginning with the date of service or publication of the notice under subsection (4) or such longer period as the Independent Supervisor may allow, make written representations to the Independent Supervisor and, if desired, oral representations to a person appointed for that purpose by the Independent Supervisor.

(7) The persons within this subsection are—

(a) the Auditor General, and

(b) any other person who appears to the Independent Supervisor to be affected.

(8) The Independent Supervisor must have regard to any representations made in accordance with subsection (6) in determining—

(a) whether to issue a notice under subsection (1), and

(b) the terms of any such notice.

(9) If in any case the Independent Supervisor considers it appropriate to do so in the public interest it may issue a notice under subsection (1), without regard to the restriction in subsection (3)(b), even if—

(a) no notice has been given or published under subsection (4), or

(b) the period of time for making representations in pursuance of such a notice has not expired.

(10) On issuing a notice under subsection (1), the Independent Supervisor must—

(a) give a copy of the notice to the Auditor General, and

(b) publish the notice in such manner as it thinks appropriate for bringing it to the attention of persons likely to be affected.

(11) In this section “specified” means specified in, or of a description specified in, the suspension notice in question.

Effect of suspension notices

1235

(1) An Auditor General must not act as a statutory auditor at any time when a suspension notice issued to him in respect of the audited person has effect.

(2) If at any time during an Auditor General's term of office as a statutory auditor a suspension notice issued to him in respect of the audited person takes effect, he must immediately—

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