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Changing auditors

Selecting the right audit firm is an important choice. This eBook takes a look at the procedures involved in changing the auditor or filling a casual vacancy in quoted companies, unquoted companies and in subsidiaries.

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Selecting the right audit firm is an important choice. Making the recommendation to the board in relation to the appointment of the external auditor is a fundamental part of the role of the audit committee, where one exists. However, auditor appointment is an important matter for shareholders as the auditor reports to them, and so the recommendation for appointment or re-appointment is ultimately for them to approve in general meeting.
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Contents

1. Quoted holding company

Chapter 1 looks at quoted companies and outlines the procedures involved in changing the auditor at either the annual general meeting (AGM) or in filling a casual vacancy - the two options available for quoted companies.

2. Unquoted companies

Chapter 2 addresses unquoted companies, again distinguishing between the procedures involved in changing auditors part-way through the year (to fill a casual vacancy) which is usually the case where there are only a few active shareholders involved in the selection process; and at the AGM or otherwise by shareholders’ resolution, which is usually the case where there are a large number of passive shareholders.

3. Subsidiaries

Chapter 3 looks at the practical implications of changing the auditors of subsidiaries. This is largely a logistical challenge, as a quoted group might have hundreds of UK subsidiaries.

4. An explanation of detailed auditor changeover rules

Chapter 4 provides an explanation of the detailed statutory rules on auditor appointment; the statutory rules on the termination of the old auditor’s appointment; and professional and contractual matters.

Appendix: Defined terms

Practical tools and other customisable content

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Terms of use

ICAEW members and ACA students can access the publication subject to the conditions set out in the terms of use, copyright statement and disclaimer below.

You are permitted to view, print and download this eBook for your personal use. Unless you have the permission of the copyright owner, you may not re-transmit the publication to anybody else.

Copyright

This publication is the copyright of ICSA Publishing Ltd.

All rights reserved. No part of this publication may be reproduced, stored in a retrieval system, or transmitted, in any form, or by any means, electronic, mechanical, photocopying, recording or otherwise, without prior permission, in writing, from the publisher. This publication is a general guide and is correct at the time of writing.

Disclaimer

The publication does not necessarily deal with every important topic or cover every aspect of the topics with which it deals. It is not intended to provide legal advice and should not be treated as a substitute for legal advice. Legal advice should always be sought before taking action based on the information provided. The authors bear no responsibility for errors and omissions.

The Institute of Chartered Accountants in England and Wales (as distributor) disclaims all liability for any errors or omissions.

Changing auditors

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Mike Metcalf ICSA Publishing Ltd, 2013

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