Company Law Reform Bill [HL]

Clause 510 enables the audit authorities, the Public Oversight Board for Accountancy or one of the supervisory bodies, to send to the accounting authorities copies of the statements of circumstances that auditors deposit with a company they are leaving for circulation to shareholders and filing at Companies House. The accounting authorities are the Secretary of State and anyone the Secretary of State has authorised to apply to the court in respect of the revision of defective accounts—that is, the Financial Reporting Review Panel, part of the Financial Reporting Council and known as the FRRP. Amendment No. 334A would extend the scope of this ability to the statements of reasons submitted to the audit authorities by auditors who have decided that there are no circumstances that need to be drawn to the attention of members or creditors. I see no need for this. The purpose of the gateway is that the audit authorities can let the FRRP know about any important problems with accounts. This is bound to be a matter on which the auditor will have made a statement of circumstances for circulation. Statements of reasons are more likely to be when an auditor has left for entirely personal reasons, such as retirement or emigration, and are unlikely to be of interest to the accountancy authorities.