The Companies Act requires companies to appoint or reappoint auditors each. Private limited companies may elect for their auditors to be automatically reappointed each year rather than having formally to reappoint them. The auditors must hold recognized professional accountancy practising certificates in order to be eligible to audit the companies’ accounts and form their opinions on the state of the companies’ affairs.
In the majority of cases auditors should be appointed by the company in the meeting in which the accounts are laid, which must be within 28 days of the previous years’ accounts being sent to shareholders. The appointment will be effective from the end of that meeting until the end of the next meeting at which accounts are laid. Private companies which have elected not to lay their accounts at general meeting, typically elect not to appoint or reappoint auditors on an annual basis so that a meeting does not have to be convened just for that purpose.
Some companies are exempt from the requirement to appoint auditors namely dormant companies and certain small companies. Companies are entitled to audit exemptions if they qualify as small companies of which their sales and assets for the financial are below the audit exemption thresholds and meet other small company eligibility conditions.
Canterbury Accountancy - Helping UK companies to understand their legal obligations under UK Companies Act.
