The Professional Oversight Board (POB) has published a press release giving more information concerning notification of changes of auditors to the appropriate audit authority. The POB have given guidance on the circumstances in which the Professional Oversight Board is the appropriate audit authority (i.e. the definition of a major audit), how the notification to the POB should be made, and what it must cover.
Where, in the case of an audit that is not a major audit, an auditor ceases to hold office before the end of his term of office, the auditor ceasing to hold office and the company must notify the appropriate audit authority - which for this purpose is the auditor’s Recognised Supervisory Body (RSB).
Notification to the ICAEW
The ICAEW have issued guidance on this subject. It says that notification should be made to the following address:
Change of Auditor Notifications
Quality Assurance Department
ICAEW Metropolitan House
321 Avebury Boulevard
Milton Keynes
MK9 2FZ
e-mail: auditorchange@icaew.com
There is no statutory format for notifying a change of auditor to the ICAEW. However, it should be clear, whether this is sent electronically or by post, who has signed the notification and in what capacity, giving contact details in case of a query. The ICAEW say that it would be useful if the notification could include the year end of the company’s last audited accounts, the company number and the address of the registered office.
If the notification is by e-mail this should be in the form of an electronic copy of a letter.
The ICAEW state that they assume that the auditors will want to notify the Institute at the same time they deposit the S519 statement at the company’s registered office, so that the matter is dealt with. Otherwise, notification can be made at any time but, at the latest, it must be made with the annual return covering the period in which the cessation took place.
By contrast, the company must notify by 14 days after the date on which the auditor’s statement has been deposited at the company’s registered office.
In the case of a group of companies, where the auditor of the parent company and of subsidiary companies are the same and cease their appointment at the same time, the auditors and the company can meet their obligations by a single statement accompanied by a list of the companies to which it applies, which should also, if appropriate, set out different reasons for the cessation in respect of different companies in the group.
Notification by the Auditor
Section 522(2) requires that the notice by the auditor to the RSB that he has ceased to hold office is accompanied by:
(i) the statement deposited at the company’s registered office in accordance with section 519, and
(ii) where the statement is to the effect that there are no circumstances in connection with ceasing to hold office, a statement of the reasons for ceasing to hold office.
Notification by the Company
Section 523(2)(b) requires that the notice by the company to the RSB that the auditor has ceased to hold office is accompanied by either:
(i) a statement by the company of the reasons for the auditor ceasing to hold office or
(ii) if the statement by the auditors deposited at the company’s registered office in accordance with section 519 contains a statement of circumstances in connection with the auditor’s ceasing to hold office that need to be brought to the attention of members or creditors, a copy of that statement.
Alan Bonham
26 June 2008