I shall speak also to Amendments 47, 49, 50, 51, 52, 54, 56, 57 and 58, which relate to the eligibility and regulation of auditors in the new local audit framework.
Commons Amendments 35, 47, 49, 54, 57 and 58 are all minor and technical tidying-up amendments. Amendment 35 would ensure that references throughout the Bill to subordinate legislation made under it will cover Part 42 of the Companies Act 2006, as applied by Schedule 5 to the Bill. This means that provisions on eligibility and regulation will be included whenever the Bill refers to subordinate legislation. Amendment 47 would insert a new subsection that will apply explicitly to Sections 1288, 1289, 1290 and 1292 of Part 42 of the Companies Act 2006 in relation to local audit. These sections set out how regulations and orders under the Companies Act are to be made.
Amendment 49 corrects a drafting error in order to mirror accurately the obligations under Schedule 10 to the Companies Act 2006. Amendment 54 makes a minor change to ensure that the definition of local auditor used in the Companies Act 2006, as modified and applied to local audit, refers to the correct clause in this Bill. Amendments 57 and 58 ensure that a body to which the Secretary of State’s functions are delegated under Schedule 5—which we expect to be the Financial Reporting Council—can be audited by either a statutory auditor or a local auditor.
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Amendments 50, 51 and 52 together specify which existing professional qualifications will be considered as appropriate qualifications for local audit in the new framework. This will ensure that individuals qualified under the Audit Commission Act 1998 will continue to be able to undertake local audit in the new regime. We had previously intended to set this out in regulations. However, to provide clarity and certainty, it will be helpful to put it in the Bill.
Amendment 56 further modifies Schedule 10 to the Companies Act 2006, as applied by Schedule 5 to this Bill, in respect of individual auditors qualified in other EEA countries. It has two main effects in respect of these individuals. First, it will enable the recognised supervisory bodies for local audit to recognise the qualifications of those individual auditors who hold the equivalent of a UK local audit qualification obtained elsewhere in the European Economic Area. Secondly, it specifies that recognised supervisory bodies can require an EEA individual statutory auditor to pass an aptitude test only if he or she is seeking to establish in the UK on a permanent basis as a local auditor. These changes are necessary to comply with the requirements of directive 2005/36/EC on the recognition of professional qualifications. Paragraph 6 of Schedule 10 to the Companies Act 2006 sets out that one of the requirements for a firm to be eligible for appointment as a local auditor is that it is controlled by qualified persons. Amendment 56 ensures that a firm is qualified if it is eligible for appointment as a local or statutory auditor, or is eligible for a corresponding appointment.
With these clarifications, I beg to move.