Company Law Reform Bill [HL]

moved Amendment No. 317BZZA:"Page 233, line 19, leave out subsection (1)." The noble Baroness said: This is a probing amendment, which would delete Clause 492(1). Clause 492(1) provides for the senior statutory auditor to be identified by the audit firm in accordance with standards issued by the European Commission or, if there are no such standards, in accordance with guidance issued by the Secretary of State or a body appointed by the Secretary of State. How does the Minister see this working when the Bill receives Royal Assent? Will the Commission have issued standards under Article 28 of the directive on statutory audit by then? If it will have not done so, will he explain the process through which it intends to go? Will the Minister say something also about the consultation that the Commission will undertake before issuing standards? The Institute of Chartered Accountants in England and Wales, which suggested the amendment, is concerned that interim guidance may have to be issued by the Secretary of State or, presumably, one of the bodies within the FRC. That would be a problem only if the UK’s approach was not then aligned with the ultimate European solution. The institute points out that International Auditing Standards already contain a definition of an ““engagement partner””. This appears in IAS 220, which deals with quality control for auditors of historical information. Would this definition be adopted for UK purposes? Perhaps more importantly, do the Government intend to back this definition for European purposes and help the Commission resist a uniquely European solution when an acceptable international definition already exists? I beg to move.