Changes to the rules on appointment of auditors introduced by the Companies Act 2006, and the associated transitional provisions, have resulted in a complex mix of possible scenarios to be considered when providing disclosures on auditor re-appointment (or not) in directors’ reports for the current reporting season.

For financial years beginning on or after 1 October 2007 the Companies Act 2006 introduces new arrangements for the reappointment of auditors of private companies to avoid the need for an annual general meeting. For public companies sections 384 to 388 of the Companies Act 1985 continue to apply.

Please note: these sections of the Companies Act 1985 will be repealed for public companies for financial years commencing on or after 6 April 2008 and replaced with sections 489 to 491 of Companies Act 2006. There are no changes of substance expected in this area for public companies as a result of the new Act. There is
some de-regulation for private companies in that going forward the default position will be that auditors are deemed to be reappointed annually unless the members give notice to the company excluding this option.

For further information, download our publication Companies Act 2006. (PDF, 251KB)

Related information
Companies Act 2006 - 1 October 2007 commencements. 
CompAct - Q&As on the 2006 Companies Act.