Want To Sack Your Auditor? Pause For Thought

If you are not seeing eye to eye with your auditor because their view of your financial statements is at variance with yours, and you are thinking of making a change of auditors, you should be aware that Sections 522 to 525 of the Companies Act 2006 set new requirements for auditors and companies to notify the ‘appropriate audit authority’ when an auditor ceases to hold office.

Furthermore, in certain circumstances, the auditor must inform shareholders and creditors of the circumstances under which they are ceasing to act.

The rules governing when a notification has to be made are complex, but guidance which makes useful reading for directors of companies in this position can be found at http://www.frc.org.uk/pob/regulation/notification.cfm. Note that both auditors and companies need to notify the ‘appropriate audit authority’, but there are significant differences in how the requirements affect auditors and companies.

Says Steen Rosenfalck “The making of a notification can have unfortunate repercussions. We can advise you on all company law matters.”

The material contained in this article is provided for general purposes only and does not constitute legal or other professional advice. Appropriate legal advice should be sought for specific circumstances and before action is taken.

© , October 2009

Please contact:

Steen Rosenfalck

DD +44 (0)20 7553 9931

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