The Statutory Auditors Regulations 2017

• (d) in the modified version of section 521 (copy of statement to be sent to registrar)—

• (i) before subsection (1) insert—

(A1) This section applies where an auditor (“A”) of an LLP sends a statement to the LLP under section 519 except where— (a) the LLP is a non-public interest LLP, and (b) the statement includes a statement to the effect that A considers that none of the reasons for A’s ceasing to hold office, and no matters (if any) connected with A’s ceasing to hold office, need to be brought to the attention of members or creditors of the LLP (as required by section 519(2E)).

• (ii) in subsection (1)—

• (aa) for “Unless” substitute “Where this section applies, unless”;

• (bb) for “deposited” substitute “sent”;

• (e) in the modified version of section 522 (duty of auditor to notify appropriate audit authority)—

• (i) in the heading, for “notify” substitute “send statement to”;

• (ii) for subsections (1) to (4) substitute—

(1) Where an auditor of an LLP sends a statement under section 519, the auditor must at the same time send a copy of the statement to the appropriate audit authority.

• (f) in the modified version of section 523 (duty of LLP to notify appropriate audit authority), for subsections (1) to (3) substitute—

(1) This section applies if an auditor is ceasing to hold office at any time other than at the end of a period for appointing auditors. (1A) But this section does not apply if the LLP reasonably believes that the only reasons for the auditor’s ceasing to hold office are exempt reasons (as to which see section 519A(3)). (2) Where this section applies, the LLP must give notice to the appropriate audit authority that the auditor is ceasing to hold office. (2A) The notice is to take the form of a statement by the LLP of what the LLP believes to be the reasons for the auditor’s ceasing to hold office and must include the information listed in section 519(2C). This is subject to subsection (2C). (2B) Subsection (2C) applies where— (a) the LLP receives a statement from the auditor under section 519, (b) the statement is sent at the time required by section 519(3), and (c) the LLP agrees with the contents of the statement. (2C) Where this subsection applies, the notice may instead take the form of a copy of the statement endorsed by the LLP to the effect that it agrees with the contents of the statement. (3) A notice under this section must be given within the period of 28 days beginning with the day on which the auditor ceases to hold office.

• (g) in the modified version of section 524 (information to be given to accounting authorities)—

• (i) in the heading, for “Information to be given” substitute “Provision of information”;

• (ii) for subsection (1) substitute—

(1) Where the appropriate audit authority receives a statement under section 522 or a notice under section 523, the authority may forward to the accounting authorities— (a) a copy of the statement or notice, and (b) any other information the authority has received from the auditor or the LLP concerned in connection with the auditor’s ceasing to hold office.

• (h) in the modified version of section 525 (meaning of “appropriate audit authority” and “major audit”)—

• (i) in the heading, omit “and “major audit””;

• (ii) in subsection (1)(a), for the words from the beginning to “Auditor General)” substitute “in relation to an auditor of a public interest LLP (other than an Auditor General)”;

• (iii) in subsection (1)(b), for the words from the beginning to “a major audit” substitute “in relation to an auditor of a non-public interest LLP (other than an Auditor General)”;

• (iv) in subsection (1)(c), for “in the case of an audit conducted by” substitute “in relation to”;

• (v) omit subsections (2) and (3).

20

In regulation 55, in the modified version of section 1173 (minor definitions: general), at the appropriate places insert—

• “the Audit Regulation” means Regulation 537/2014 of the European Parliament and of the Council on specific requirements regarding statutory audit of public interest entities[^f00084];

; and

• “the competent authority” means the Financial Reporting Council Limited[^f00085]

21

In regulation 59 (review)—

• (a) for paragraph (1)(a) substitute—

(a) carry out a review of the regulatory provision contained in these Regulations to which amendments have been made by— (i) Part 2 of the Limited Liability Partnerships, Partnerships and Groups (Accounts and Audit) Regulations 2016 (“the 2016 Regulations”), and (ii) Schedule 3 to the Statutory Auditors Regulations 2017,

• (b) after paragraph (1) insert—

(1A) Section 30(3) of the Small Business, Enterprise and Employment Act 2015[^f00086] requires that a review carried out under paragraph (1)(a)(ii) of this regulation must, so far as is reasonable, have regard to how— (a) Articles 28 and 38 of Directive 2006/43/EC of the European Parliament and of the Council on statutory audits of annual accounts and consolidated accounts, amending Council Directives 78/660/EEC and 83/349/EEC and repealing Council Directive 84/253/EEC[^f00087], and (b) Articles 16, 17 and 41 of Regulation (EU) No 537/2014 of the European Parliament and of the Council on specific requirements regarding statutory audit of public-interest entities and repealing Commission Decision 2005/909/EC, are implemented in other member States.

• (c) in paragraph (2), for “The report” substitute “Section 30(4) of the Small Business, Enterprise and Employment Act 2015 requires that a report published under this regulation”;

• (d) in paragraph (5)—

• (i) for “meaning given by section 32(4)” substitute “same meaning as in sections 28 to 32”;

• (ii) after “Act 2015” insert “(see section 32 of that Act)”.

SCHEDULE 4 — Revocations and repeals

Signed

Margot James — Minister for Small Business, Consumers and Corporate Responsibility — Department for Business, Energy and Industrial Strategy — 28th November 2017

Explanatory note

(This note is not part of the Regulations)

EXPLANATORY NOTE

These Regulations implement obligations in Directive 2014/56/EU of the European Parliament and of the Council of 16 April 2014 amending Directive 2006/43/EC on statutory audits of annual accounts and consolidated accounts (OJ L 157, 09.06.06, p.87) and Regulation (EU) 537/2014 of the European Parliament and of the Council of 16 April 2014 on specific requirements regarding statutory audit of public-interest entities and repealing Commission Decision 2005/909/EC (“the Audit Regulation”) (OJ L 158, 27.05.14, p.77). The amended Directive 2006/43/EC is known as “the Audit Directive”. The Audit Regulation is directly applicable, but changes have been made to domestic law to remove inconsistencies between domestic law and the Audit Regulation.

Previous transposing regulations were the Statutory Auditors and Third Country Auditors Regulations 2016 (S.I. 2016/649) and the Statutory Auditors and Third Country Auditors Regulations 2017 (S.I. 2017/516). This instrument completes the transposition for the United Kingdom.

Regulation 3 and Schedule 1 make amendments in respect of the transposition for building societies, friendly societies and companies, in particular to provide an effective enforcement mechanism for the rotation and retendering for statutory auditors, and also to provide consistency between the legislative frameworks for these entities.

Regulation 4 and Schedule 2 make amendments to the Insurance Accounts Directive (Miscellaneous Insurance Undertakings) Regulations 2008 (S.I. 2008/565) to implement requirements of the Audit Directive and the Audit Regulation in respect of miscellaneous forms of insurance undertaking. This includes insurers that are co-operative or community benefit societies (previously industrial and provident societies) in Great Britain, and industrial and provident societies in Northern Ireland. However, from 6th April 2018, when certain amendments to the Industrial and Provident Societies Act (Northern Ireland) 1969 (c. 24) made by the Credit Unions and Co-operative and Community Benefit Societies Act (Northern Ireland) 2016 (c. 16) come into force, new societies in Northern Ireland will be co-operative or community benefit societies.

Regulation 5 and Schedule 3 make amendments to the Limited Liability Partnerships (Accounts and Audit) (Application of Companies Act 2006) Regulations 2008 (S.I. 2008/1911). This is to give effect to requirements of the Audit Directive and the Audit Regulation for limited liability partnerships which are public-interest entities, and otherwise to mirror the legislative framework for companies to ensure consistency of requirements for the auditing of different types of business entities.

Regulations 6 to 13 make consequential amendments to the Companies (Revision of Defective Accounts and Reports) Regulations 2008 (S.I. 2008/373) to take account of the changes to the requirements in respect of audit reporting made by the Statutory Auditors and Third Country Auditors Regulations of both 2016 and 2017 and by these Regulations.

Regulations 15 and 16 make consequential amendments to the Statutory Auditors and Third Country Auditors Regulations 2016 (S.I. 2016/649). Regulations 17 and 18 make consequential amendments to the Statutory Auditors (Amendment of Companies Act 2006 and Delegation of Functions etc) Order 2012 (S.I. 2012/1741).

Regulation 19 and Schedule 4 give effect to a number of revocations and repeals. The Bank Accounts Directive (Miscellaneous Banks) Regulations 2008 (S.I. 2008/567) are revoked for accounting years beginning on or after 30th November 2018, as there will no longer be any miscellaneous banks in existence by that date. There are also consequential revocations and repeals, and the revocation of spent enactments.

On 23 June, the EU referendum took place and the people of the United Kingdom voted to leave the European Union. Until exit negotiations are concluded, the UK remains a full member of the European Union and all the rights and obligations of EU membership remain in force. During this period the Government will continue to negotiate, implement and apply EU legislation. The outcome of these negotiations will determine what arrangements apply in relation to EU legislation in future once the UK has left the EU.

A transposition note is available alongside these Regulations at www.legislation.gov.uk.

A full regulatory impact assessment of the effect of transposition of the Audit Directive and the Audit Regulation on the costs of business and the voluntary sector is available from the Business Environment Directorate, Department for Business, Energy and Industrial Strategy, 1 Victoria Street, London SW1H OET or from www.gov.uk/beis, and is also available alongside the Statutory Auditors and Third Country Auditors Regulations 2016 at www.legislation.gov.uk.

Footnotes

[^f00001]: S.I. 2007/1679.

[^f00002]: 1972 c. 68. Section 2(2) was amended by section 27 of the Legislation and Regulatory Reform Act 2006 (c. 51) and by section 3 of, and Part 1 of the Schedule to, the European Union (Amendment) Act 2008 (c. 7). Other amendments have been made that are not relevant.

[^f00003]: 2000 c. 12. Section 17 was amended by S.I. 2009/1804.

[^f00004]: 2006 c. 46. Section 454 was amended by S.I. 2013/1970.

[^f00005]: 1992 c. 40. Section 78(1) was amended by S.I. 2001/2617, 2008/1140 and 2013/496.

[^f00006]: 1986 c. 53. Section 81(2) was amended by S.I. 2001/2617 and 2013/496.

[^f00007]: Section 444 was amended by S.I. 2008/393, 2013/308 and 2015/980. Section 444A was inserted by S.I. 2008/393 and amended by S.I. 2009/1581. Section 445 was amended by S.I. 2008/393, 2013/1970 and 2015/980. Section 446 was amended by S.I. 2008/393, 2009/1581 and 2013/1970. Section 447 was amended by S.I. 2009/1581 and 2013/1970.

[^f00008]: 2014 c. 14.

[^f00009]: S.I. 2008/565, amended by S.I. 2013/472, 2014/1815 and 2015/575.

[^f00010]: The registrar as within the meaning given by section 1(1) of the Industrial and Provident Societies Act (Northern Ireland) 1969 (c. 24 (N.I.)).

[^f00011]: 1969 c. 24 (N.I.). Section 48 was amended by S.I. 1997/2984 (N.I. 22), S.I. 2009/1941 and paragraph 38 of Schedule 1 to the Credit Unions and Co-operative and Community Benefit Societies Act (Northern Ireland) 2016 (c. 16 (N.I.)).

[^f00012]: S.I. 2008/1911; the relevant amending instrument is S.I. 2016/575.

[^f00013]: See section 119 of that Act for the definition of building society. There are amendments to that section but none is relevant.

[^f00014]: Section 117 has been amended by paragraph 15 of Schedule 9 to the Financial Services (Banking Reform) Act 2013 (c. 33), and section 117A was inserted by paragraph 16 of Schedule 9 to that Act.

[^f00015]: See in particular section 116 of that Act for the definition of friendly society. Section 116 has been amended, but the amendment is not relevant.

[^f00016]: S.I. 2008/373; amended by S.I. 2013/1971, 2013/2224 and 2015/980.

[^f00017]: Section 495 was amended by S.I. 2013/3008, 2016/649 and 2017/516.

[^f00018]: Section 496 was substituted by S.I. 2015/980 and amended by S.I. 2016/649.

[^f00019]: OJ No L 243, 11.09.02, p. 1, amended by Regulation (EC) No 297/2008 ( OJ No L 97, 09.04.08, p. 62).

[^f00020]: Section 498 was amended by S.I. 2008/393, 2013/1970 and 2016/649.

[^f00021]: Section 479A was inserted by S.I. 2012/2301 and partially substituted by S.I. 2015/980.

[^f00022]: 2015 c. 26. Section 30(3) was amended by section 19 of the Enterprise Act 2016 (c. 12).

[^f00023]: OJ No L 157, 09.06.06, p.87, last amended by Directive 2014/56/EU (OJ No L 158, 27.05.14, p. 196).

[^f00024]: S.I. 2016/649, amended by S.I. 2017/516.

[^f00025]: S.I. 2012/1741, amended by S.I. 2014/2009, 2016/649 and 2017/516.

[^f00026]: Entries 1 to 4 concern spent enactments.

[^f00027]: S.I. 2008/567, amended by S.I. 2013/472.

[^f00028]: 1986 c. 53.

[^f00029]: Schedule 10C was inserted by S.I. 2008/1519.

[^f00030]: Relevant amending instruments are S.I. 2008/519, 2013/496, 2016/649 and 2017/516.

[^f00031]: 2006 c. 46. Section 1248 was amended by S.I. 2015/664.

[^f00032]: 1992 c. 40.

[^f00033]: Schedule 13F was inserted by S.I. 2008/1140.

[^f00034]: Schedule 14A was inserted by S.I. 2017/516.

[^f00035]: 2006 c. 46.

[^f00036]: Section 444 was amended by S.I. 2008/393, 2013/3008 and 2015/980.

[^f00037]: Section 444A was inserted by S.I. 2008/393 and amended by S.I. 2009/1581.

[^f00038]: Section 445 was amended by S.I. 2008/393, 2013/1970 and 2015/980.

[^f00039]: Section 446 was amended by S.I. 2008/393, 2009/1581 and 2013/1370.

[^f00040]: Section 447 was amended by S.I. 2009/1581 and 2013/1370.

[^f00041]: Section 463 was amended by S.I. 2013/1370.

[^f00042]: Section 486 was amended by S.I. 2016/649 and 2017/516.

[^f00043]: Sections 485A and 485B were inserted by S.I. 2016/649 and amended by S.I. 2017/516. Section 485C was inserted by S.I. 2017/516.

[^f00044]: Section 490 was amended by S.I. 2016/649 and 2017/516.

[^f00045]: Sections 489A and 489B were inserted by S.I. 2016/649 and amended by S.I. 2017/516. Section 489C was inserted by S.I. 2017/516.

[^f00046]: Section 494ZA was inserted by S.I. 2017/516.

[^f00047]: Section 1221 was amended by S.I. 2007/3494.

[^f00048]: Schedule 10 was amended by S.I. 2016/649.

[^f00049]: S.I. 2008/565, amended by S.I. 2013/472, 2014/1815 and 2015/575.

[^f00050]: 1969 c. 24 (N.I.). Section 1A was inserted into the Industrial and Provident Societies Act (Northern Ireland) 1969 (c. 24), and that Act was renamed, by section 8 of the Credit Unions and Co-operative and Community Benefit Societies Act (Northern Ireland) 2016 (c. 16 (N.I.)).

[^f00051]: Chapter 4A was inserted by S.I. 2013/1970 and amended by S.I. 2015/980 and 2016/1245.

[^f00052]: Paragraph 1A of Schedule 7 to S.I. 2008/410 was inserted by S.I. 2013/1970.

[^f00053]: 1965 c. 12. The Act was repealed by the Co-operative and Community Benefit Societies Act 2014 (c. 14).

[^f00054]: 2014 c. 14.

[^f00055]: Section 486 was amended by S.I. 2016/649 and 2017/516.

[^f00056]: Section 487 was amended by S.I. 2016/649 and 2017/516.

[^f00057]: Section 494ZA was inserted by S.I. 2017/516.

[^f00058]: Section 496 was substituted by S.I. 2015/980 and amended by S.I. 2016/649.

[^f00059]: 2006 c. 46. Sections 508 and 509 were amended by S.I. 2016/649.

[^f00060]: A company registered in England and Wales with number 02486368.

[^f00061]: 1968 c. 55. The Act was partially repealed by the Friendly Societies Act 1974 (c. 46) and S.I. 2001/2617, and was wholly repealed by the Co-operative and Community Benefit Societies Act 2014 (c. 14).

[^f00062]: 2015 c. 26. Section 30(3) was amended by section 19 of the Enterprise Act 2016 (c. 12).

[^f00063]: OJ No L 157, 09.06.06, p.87, last amended by Directive 2014/56/EU (OJ No L 158, 27.05.14, p. 196).

[^f00064]: OJ No L 158, 27.05.14, p. 77.

[^f00065]: 2006 c. 46. Section 396 was amended by S.I. 2013/3008 and 2015/980.

[^f00066]: S.I. 2008/565, amended by S.I. 2013/472, 2014/1815 and 2015/575.

[^f00067]: Section 404 was amended by S.I. 2015/980.

[^f00068]: 1969 c. 24 (N.I.).

[^f00069]: S.I. 2008/1911; relevant amending instruments are S.I. 2009/1804, 2011/1043, 2012/1741, 2014/1815 and 2016/575.

[^f00070]: OJ No L 182, 29.06.13, p. 19, last amended by Council Directive 2014/102/EU (OJ No L 334, 21.11.14, p. 86.

[^f00071]: OJ No L 176, 27.06.13, p. 1.

[^f00072]: OJ No L 176, 27.06.2013, p. 338, last amended by Directive 2014/59/EU (OJ No L 173, 12.06.14, p. 190).

[^f00073]: OJ No L 374, 31.12.91, p. 7, last amended by Directive 2006/46/EC (OJ No L 224, 16.08.06, p. 1).

[^f00074]: OJ No L 157, 09.06.06, p.87, last amended by Directive 2014/56/EU (OJ No L 158, 27.05.14, p. 196).

[^f00075]: Section 102A was substituted by S.I. 2005/1433 and amended by S.I. 2015/1755.

[^f00076]: OJ No L 176, 27.06.13, p. 1.

[^f00077]: OJ No L 176, 27.06.2013, p. 338, last amended by Directive 2014/59/EU (OJ No L 173, 12.06.14, p. 190).

[^f00078]: Section 103 was substituted by S.I. 2005/1433 and amended by paragraphs 1 and 11 of Schedule 15 to the Companies Act 2006 (c. 46). There are other amendments but none is relevant.

[^f00079]: OJ No L 145, 30.04.2004, p. 1, last amended by Directive 2010/78/EU (OJ No L 331, 15.12.10, p. 120).

[^f00080]: A company registered in England and Wales with number 02486368.

[^f00081]: Section 102A was substituted by S.I. 2005/1433 and amended by S.I. 2015/1755.

[^f00082]: Section 103 was substituted by S.I. 2005/1433 and amended by paragraphs 1 and 11 of Schedule 15 to the Companies Act 2006 (c. 46). There are other amendments but none is relevant.

[^f00083]: OJ No L 145, 30.04.2004, p. 1, last amended by Directive 2010/78/EU (OJ No L 331, 15.12.10, p. 120).

[^f00084]: OJ No L 158, 27.05.14, p. 77.

[^f00085]: A company registered in England and Wales with number 02486368.

[^f00086]: 2015 c. 26. Section 30(3) was amended by section 19 of the Enterprise Act 2016 (c. 12).

[^f00087]: OJ No L 157, 09.06.06, p.87, last amended by Directive 2014/56/EU (OJ No L 158, 27.05.14, p. 196).