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Company Law Reform Bill [HL]

I shall read my speaking note and then give the shortened version afterwards. This clause provides that an auditor general must ensure that individual statutory auditors within his charge that are carrying out statutory audits on the auditor general’s behalf are in their own right eligible for appointment as a statutory auditor by virtue of the qualifications and requirements that are set out in Chapter 2. This is a sensible provision because it makes a legal requirement for auditors general to employ qualified persons to carry out their company audits. It matches what is expected of an auditor in the private sector and ensures that audits are carried out to a high standard. Amendment No. A241 would require differential or additional standards, although I understand that it is a probing amendment. To be eligible for an appointment, an auditor must be a member of a recognised supervisory body and be eligible for appointment under its rules. The body has a statutory obligation to ensure that persons eligible hold appropriate qualifications. Not only this, but it must also ensure that they maintain an appropriate level of competence, that they are fit and proper to act as auditors, and that their integrity and independence is maintained. These are the same rigorous criteria that an auditor working for a private firm must meet to be eligible to audit a company NDPB. I do not see the argument for imposing additional standards, although I understand that that was not being pressed as part of this amendment. The short answer is that this is a requirement of the eighth company directive on audit, which is why it is in these terms.