Companies Act 1989 Schedule 11

Fletcher Kennedy Limited- Company Formation Services
Companies Act 1989
1989 c. 40 - continued

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	SCHEDULE 11
Section 30(5).
	Recognition of Supervisory Body
	Part I
	Grant and Revocation of Recognition
	Application for recognition of supervisory body
	1.(1) A supervisory body may apply to the Secretary of State for an order declaring it to be a recognised supervisory body for the purposes of this Part of this Act. (2) Any such application (a) shall be made in such manner as the Secretary of State may direct, and (b) shall be accompanied by such information as the Secretary of State may reasonably require for the purpose of determining the application. (3) At any time after receiving an application and before determining it the Secretary of State may require the applicant to furnish additional information. (4) The directions and requirements given or imposed under sub-paragraphs (2) and (3) may differ as between different applications. (5) Any information to be furnished to the Secretary of State under this paragraph shall, if he so requires, be in such form or verified in such manner as he may specify. (6) Every application shall be accompanied by a copy of the applicant's rules and of any guidance issued by the applicant which is intended to have continuing effect and is issued in writing or other legible form.
	Grant and refusal of recognition
	2.(1) The Secretary of State may, on an application duly made in accordance with paragraph 1 and after being furnished with all such information as he may require under that paragraph, make or refuse to make an order (a "recognition order") declaring the applicant to be a recognised supervisory body for the purposes of this Part of this Act. (2) The Secretary of State shall not make a recognition order unless it appears to him, from the information furnished by the body and having regard to any other information in his possession, that the requirements of Part II of this Schedule are satisfied as respects that body. (3) The Secretary of State may refuse to make a recognition order in respect of a body if he considers that its recognition is unnecessary having regard to the existence of one or more other bodies which maintain and enforce rules as to the appointment and conduct of company auditors and which have been or are likely to be recognised. (4) Where the Secretary of State refuses an application for a recognition order he shall give the applicant a written notice to that effect specifying which requirements in the opinion of the Secretary of State are not satisfied or stating that the application is refused on the ground mentioned in sub-paragraph (3). (5) A recognition order shall state the date on which it takes effect.
	Auditors to be fit and proper persons
	6.(1) The body must have adequate rules and practices designed to ensure that the persons eligible under its rules for appointment as a company auditor are fit and proper persons to be so appointed. (2) The matters which the body may take into account for this purpose in relation to a person must include (a) any matter relating to any person who is or will be employed by or associated with him for the purposes of or in connection with company audit work; and (b) in the case of a body corporate, any matter relating to any director or controller of the body, to any other body corporate in the same group or to any director or controller of any such other body; and (c) in the case of a partnership, any matter relating to any of the partners, any director or controller of any of the partners, any body corporate in the same group as any of the partners and any director or controller of any such other body. (3) In sub-paragraph (2)(b) and (c) "controller" , in relation to a body corporate, means a person who either alone or with any associate or associates is entitled to exercise or control the exercise of 15 per cent. or more of the rights to vote on all, or substantially all, matters at general meetings of the body or another body corporate of which it is a subsidiary.
	Professional integrity and independence
	7.(1) The body must have adequate rules and practices designed to ensure (a) that company audit work is conducted properly and with integrity, and (b) that persons are not appointed company auditor in circumstances in which they have any interest likely to conflict with the proper conduct of the audit. (2) The body must also have adequate rules and practices designed to ensure that no firm is eligible under its rules for appointment as a company auditor unless the firm has arrangements to prevent (a) individuals who do not hold an appropriate qualification, and (b) persons who are not members of the firm, from being able to exert any influence over the way in which an audit is conducted in circumstances in which that influence would be likely to affect the independence or integrity of the audit.
	Technical standards
	8. The body must have rules and practices as to the technical standards to be applied in company audit work and as to the manner in which those standards are to be applied in practice.
	Procedures for maintaining competence
	9. The body must have rules and practices designed to ensure that persons eligible under its rules for appointment as a company auditor continue to maintain an appropriate level of competence in the conduct of company audits.
	Monitoring and enforcement
	10.(1) The body must have adequate arrangements and resources for the effective monitoring and enforcement of compliance with its rules. (2) The arrangements for monitoring may make provision for that function to be performed on behalf of the body (and without affecting its responsibility) by any other body or person who is able and willing to perform it.
	Membership, eligibility and discipline
	11. The rules and practices of the body relating to (a) the admission and expulsion of members, (b) the grant and withdrawal of eligibility for appointment as a company auditor, and (c) the discipline it exercises over its members, must be fair and reasonable and include adequate provision for appeals.
	Investigation of complaints
	12.(1) The body must have effective arrangements for the investigation of complaints (a) against persons who are eligible under its rules to be appointed company auditor, or (b) against the body in respect of matters arising out of its functions as a supervisory body. (2) The arrangements may make provision for the whole or part of that function to be performed by and to be the responsibility of a body or person independent of the body itself.
	Meeting of claims arising out of audit work
	13.(1) The body must have adequate rules or arrangements designed to ensure that persons eligible under its rules for appointment as a company auditor take such steps as may reasonably be expected of them to secure that they are able to meet claims against them arising out of company audit work. (2) This may be achieved by professional indemnity insurance or other appropriate arrangements.
	Register of auditors and other information to be made available
	14. The body must have rules requiring persons eligible under its rules for appointment as a company auditor to comply with any obligations imposed on them by regulations under section 35 or 36.
	Taking account of costs of compliance
	15. The body must have satisfactory arrangements for taking account, in framing its rules, of the cost to those to whom the rules would apply of complying with those rules and any other controls to which they are subject.
	Promotion and maintenance of standards
	16. The body must be able and willing to promote and maintain high standards of integrity in the conduct of company audit work and to co-operate, by the sharing of information and otherwise, with the Secretary of State and any other authority, body or person having responsibility in the United Kingdom for the qualification, supervision or regulation of auditors.
© Crown copyright 1989