Company Law Reform Bill [HL]

moved Amendment No. A241: "Page 390, line 31, at end insert—" ““(   )   The individuals responsible for statutory audit work for the purposes of subsection (1) shall be determined in accordance with standards set by the Secretary of State.”” The noble Baroness said: I shall move Amendment No. A241 and speak also to Clause 824 stand part. I am mystified by how the new provisions for Auditors General are supposed to work in practice. When I moved Amendment No. 317B, which dealt with who signed the audit report when an Auditor General is appointed auditor, the Minister told the Committee that as the Auditor General is a corporation sole, which is in turn a firm, the provisions of Clauses 491 and 492 needed no modification because there would be a senior statutory auditor appointed within the framework set out for all auditors. That framework includes either European Commission standards or Secretary of State guidance and also Clause 492(2), as amended in Committee, says that the senior statutory auditor must be eligible for appointment as an auditor. When we reach Clause 824 we find that there is a new concept of an, "““individual responsible for statutory audit work””," who must in turn be eligible for appointment as a statutory auditor. If a senior statutory auditor is going to have to meet the requirements of Clause 492, is it not completely redundant to state in Clause 824 that the person responsible for the audit must be capable of being a statutory auditor? We will have senior statutory auditors for the auditor general’s audits and that will be the end of the matter. My Amendment No. A241 seeks to address this issue by saying that if there is a category of individual, "““responsible for statutory audit work””," we ought to be clear who is setting the standards for the identification of that individual, as in the earlier part of the Bill. I have nominated the Secretary of State, but that is because I find it difficult to draft any powers for the European Commission though I concede that the Commission may be logical in the scheme of this Bill. My tabling of stand part is, I believe, the better approach. We really only need to know who the statutory auditor is when Auditor General audits are involved. We already have Clause 492 which sets the framework for qualification as a statutory auditor. There is no need for the Auditors General to do anything under Clause 824 as by definition the statutory auditor provisions are self-sufficient. Alternatively, if Clause 824 is necessary for audits by Auditors General, there ought to be an equivalent clause in Part 16 which says that audit firms must secure that individuals responsible for statutory audit work are eligible to be statutory auditors. I beg to move.