23 April, 2015
The Deregulation Act 2015 has been passed as part of the government's Red Tape Challenge. In particular, section 18 of the Act seeks to simplify the rules regarding auditors' notification requirements. The section will be brought into force by the Secretary of State, though the date is currently unknown.
The new provisions mean that an auditor is not required to provide a non-listed company with a statement of reasons for leaving where:
The following are "exempt reasons":
Similarly, an auditor is not required to notify the appropriate audit authority of its reasons for leaving where an "exempt reason" applies and there is no additional attention to be brought to the authority's attention.
Auditors of a listed company are still required to provide a statement of reasons for leaving office.
A company is not required to send an outgoing auditor a copy of the written resolution which proposes to appoint a new auditor where:
Where an auditor is providing a statement of its reasons for leaving, it must include information which it considers should be brought to the attention of the company's shareholders and creditors. If there is no such information, then a statement should be included to that effect.