Members may be aware that the recently made Statutory Instrument, SI 220 of 2010, European Communities (Statutory Audits)(Directive 2006/43/EC) Regulations 2010 (‘the Regulations’) removed the previous company law prohibition on a statutory auditor being a ‘body corporate’. This represents a significant change in the legal framework under which statutory audits are conducted and affords a measure of protection for auditors compared to the previous liability regime which auditors have had to endure. The change also follows a long campaign by the Institute for reform in this area, although we do believe that further reforms are needed.
Legal advice is currently being obtained on a number of aspects of incorporation. These include clarification of effectives dates, whether appointments held as ‘public auditor’ may be held by incorporated entities, and interaction with the Audit Regulations. Information and guidance on these issues will be made available to members as soon as possible.
The Institute and CARB are also working with CCAB-I and other interested parties to develop information and guidance on key aspects of the new Regulations. This will be made available as soon as possible.