Company Law Reform Bill [HL]

moved Amendment No. 353:"Page 245, line 3, leave out ““and the company””" The noble Baroness said: My Lords, in moving Amendment No. 353, I shall speak also to the other amendments in my name in this group. This is a slightly complicated group of amendments because, as the House will see, the Government have tabled Amendments Nos. 361 and 362, which introduce two new clauses in place of Clause 513. These new clauses highlight the points made by my amendments in this group, but I fear that, far from answering them, they accentuate the points that I was making. We have been concerned about the duplication of information flows. Clause 513 and, indeed, the replacement clauses require both the auditor and the company to send identical information to the appropriate audit authorities. We do not believe in waste, and we can see no practical purpose for double information flows unless it is simply to provide evidence that either the company or the auditor has not done what Clause 513 requires for the purposes of a prosecution. I am aware that the information flows from a company are reduced in the Government’s amendments but, unless the Minister makes a convincing case that these duplicate flows should remain, we shall have reservations about accepting the Government’s amendments in this group. I have one question to put to the Minister about his Amendment No. 370, which is in the next group of amendments but has a bearing on these amendments. Amendment No. 370 defines the appropriate audit authority in subsection (1)(a) of the new clause after Clause 514. In the case of a major audit, this is either the Secretary of State or another body, which I believe will be the Public Oversight Board for Accountants. Can the Minister clarify whether it is for the company and the auditors under his new clauses to choose to whom the notifications and statements are sent? If so, what happens if the company sends material to the Secretary of State and the auditors send material to POBA? Do they have to check with each other and do they have to send information to one or both? Are we not creating the possibility of some dreadful paper chases between Whitehall and the City? We do not oppose the thrust behind Clause 513 and we agree that information about auditor resignations should be passed to the appropriate audit authorities. But we believe that the associated processes should be as efficient as possible and should be based on the principle of avoiding rather than creating bureaucracy. I beg to move.