Companies Act 2006, Part 42

The main purposes of this part of the Act are to ensure that only those who
are properly supervised and appropriately qualified are appointed auditors
and that audits are carried out properly, with integrity and a proper degree
of independence (s.1209).

Eligibility (s.1212)

An auditor must be a member of a Recognised Supervisory Body (RSB)
and must be entitled under the RSB’s rules to act as auditor (this
establishes the concept of a Registered Auditor).

Ineligibility (s.1213)

A person cannot act as auditor if they are ineligible. If someone is
appointed and then becomes ineligible, they must resign immediately and
give notice to the company.

Independence requirement (s.1214)

A person cannot act as auditor if they are an officer or employee of the
company to be audited, or if they are the partner or employee of an
officer or employee; or if they are an officer or employee of an associated
undertaking (parent company or subsidiary).

Effect of lack of independence (s.1215)

If during his term of office, an auditor becomes prohibited from acting
(under the independence requirement), he must resign immediately and
give notice to the company in writing. It is an offence if he does not comply.

Effect of appointing a partnership (s.1216)

If a partnership is appointed, the firm is the auditor not the individual
partner(s).

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