Procedure

Procedure

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Hi all

Can anyone settle an arguement?

We have a client who required an audit last year but due to the change in legislation no longer needs one so isn't having one.

We still have the client and will be preparing audit exempt accounts - what do we need to do in terms of ceasing to be auditors?

Thanks

Replies (6)

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By mrme89
25th Jul 2013 10:32

Issue a revised engagement letter

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Euan's picture
By Euan MacLennan
25th Jul 2013 10:33

You need to comply with the law

... as set out in s.519(2) CA 2006 and following sections.

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By User deleted
25th Jul 2013 12:00

Certainly for ACCA ...

... you have to notify them too, with a copy of the s519 notice.

I imagine ICAEW have similar requirements.

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Euan's picture
By Euan MacLennan
25th Jul 2013 12:11

Nothing to do with ACCA or ICAEW

The requirement to notify the "appropriate audit authority" is set out in s.522 CA 2006 and only applies where the auditor has ceased to hold office before the end of his term of office.  As his term of office as an auditor would normally extend only to the date of signing off the audit report on each successive set of accounts, I don't think that this clause is triggered where the company no longer requires to have its accounts audited because the audit exemption rules have been changed.

I doubt that either the ICAEW or ACCA have been deluged with such statements for companies no longer required to have audits.

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By User deleted
25th Jul 2013 12:42

Disagree ...

... as generally you will cease to be auditor beofre the end of the term, as the last years account will in most cases have re-appointed you, so if the next accounts are not required to be audited s522 applies!

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Replying to vstrad:
Euan's picture
By Euan MacLennan
25th Jul 2013 14:07

That might be the case ...

Old Greying Accountant wrote:

... as generally you will cease to be auditor beofre the end of the term, as the last years account will in most cases have re-appointed you, so if the next accounts are not required to be audited s522 applies!

... where (say) turnover falls in the following year, but probably not where there has been an announcement in advance that the audit exemption rules will be relaxed.

Either way, the essential requirement is for the auditor to submit a statement to the company under s.519 CA 2006 and send a copy to Companies House under s.521 - and, of course, to re-issue his engagement letter.

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