Company law · When something changes

Appointing or removing an auditor

Companies Act 2006 Part 16 · Audit

Part 16 of the Companies Act 2006 governs the audit of company accounts, including how a company appoints an auditor and the procedure for removing one. Many small companies qualify for the audit exemption, and where the exemption applies the company does not appoint an auditor and its accounts state that they are unaudited. Whether your company can take the exemption depends on its size and on whether any member requires an audit.

Where an audit is required, the appointment of the auditor and any later removal follow the procedure in Part 16, and the auditor has rights that the company must respect, including notice and the chance to make representations on removal. The decision to take the exemption, or to appoint or change an auditor, is one the company should record, because it affects how the accounts are prepared and filed.

The Audit and Auditors working file in the ComplianceSME Companies Act 2006 system tests whether your company qualifies for the audit exemption, and where an audit is required it takes you through the appointment or removal. It records the decision, the reasons and the procedure followed. It asks you about your size and your members' wishes, one question at a time, then produces the evidence that the audit position was handled correctly.

Everything beyond the Companies Act 2006 has its own system in the full register.