Company Law Reform Bill [HL]

My Lords, Clause 484 is one of a small number of new provisions, despite the protestations, relating to the appointment of auditors. It provides a power to require companies to disclose the terms on which a company engages its auditors. We heard a number of arguments against this provision in Grand Committee, but I do not believe that any of them are wholly compelling. The auditors’ central role is to provide assurance to the members of the company about the directors’ stewardship. Published audit accounts also provide vital information for third parties so that markets can work well. I can see no good reason, other than cost, for not giving those members and third parties access to the audit engagement letter.