Want to Sack Your Auditor? Pause for Thought

If you are not seeing eye to eye with your auditor because their view of your financial statements is at variance with yours, and you are thinking of making a change of auditors, you should be aware that Sections 522 to 525 of the Companies Act 2006 set new requirements for auditors and companies to notify the ‘appropriate audit authority’ when an auditor ceases to hold office.

Furthermore, in certain circumstances, the auditor must inform shareholders and creditors of the circumstances under which they are ceasing to act.

The rules governing when a notification has to be made are complex, but guidance which makes useful reading for directors of companies in this position can be found on the Financial Reporting Council website. Note that both auditors and companies need to notify the ‘appropriate audit authority’, but there are significant differences in how the requirements affect auditors and companies.