Appointing or removing an auditor

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.