Clause 13.—(QUALIFICATION FOR APPOINTMENT AS AUDITOR.) (Hansard, 19 July 1967)

§ Mr. Darling
I beg to move, Amendment No. 161, in page 12, line 6, to leave out 'section 161(2)(b)' and to insert: 'subsection (2)(b) or (3) of section 161'.

§ Mr. Deputy Speaker (Mr. Sydney Irving)
With this Amendment we can also discuss Amendments Nos. 162, 163, 164, 166, 178, 179, 222, 223 and 224.

§ Mr. Darling
The Clause as drafted would achieve the purpose which is 2292 clearly expressed in the Clause when the company is not a member of a group of companies. We are dealing with auditors of what were private companies, and so long as the auditor is a director of a company, in certain circumstances he could carry on with the auditing. This is all right provided the company he is working for is not a member of a group of companies.
When the company is a member of a group then we have discovered that we get into a number of difficulties. I am 2293 sure that the hon. Gentleman the Member for Scarborough and Whitby (Mr. Michael Shaw) is well aware of that. We would, in certain circumstances, disqualify accountants altogether, merely because the company that one may be working for happens to be a member of a group of companies. I am sure that the hon. Member for Scarborough and Whitby would not wish me to explain all the combinations of different groups of companies that would upset the auditing arrangements we have in mind—I have a list of them here, all kinds of hypothetical groupings.
What we are doing is making sure we do not put an unnecessary embargo upon the continuation of the auditing arrangements that would otherwise be provided for in this Clause, if the company concerned was not a member of a group of companies.

§ Mr. Michael Shaw
I entirely agree with everything the right hon. Gentleman has said, and to show my entire approbation I will merely thank him for spotting this anomaly. It would have been awkward had it not been spotted in time.

§ Mr. Ben Ford (Bradford, North)
I welcome the Amendments to Clause 13, which expand and amplify its meaning. Rising to speak at this time I feel rather like a Trappist monk coming out of a close order and breaking his vows, but, after all, this House is, I suppose, a monastic institution in some respects.
I do not propose to detain the House very long. I have not submitted any Amendments on this point. The hon. Member for City of Chester (Mr. Temple) was fortunate enough to secure some Amendments by the Government. It seems almost as though one's victory is in relation to the length of time one takes in Committee, which perhaps is a lesson to be learned for a future date.
The purpose of the Clause, as amended, taken in conjunction with Clause 2, is that it could cause some accountants who are not members of organised bodies to be excluded from the practice of accountancy, although one recognises that certain safeguards, at least of a temporary nature, have been put into the Bill.
There is a provision for extending individual authorisation of accountants in 2294 the Clause. I must stress again the point that this will extend quite considerably the number of accountants practising who are not subject to any disciplinary control or required to act under professional ethics or etiquette. I hope that, with the measures that are being taken at the moment, my right hon. Friend will act as quickly as possible to amend this state of affairs.
We have heard many references in Committee and on Report to the dearth of accountants. If my right hon. Friend will hasten his actions concerning authorisation, or recognition by the Board of Trade of certain of the non-recognised bodies, I am hopeful that this will help out in all departments of commerce and industry.
I have two specific questions to put to him. First, in relation to non-recognised bodies of accountants, in Committee we mentioned the positon of students now, as it were, in the pipeline. My right hon. Friend told the Committee: However, I should like to say that in the case of students there is a problem which we recognise."—[OFFICIAL REPORT, Standing Committee E, 21st March, 1967; c. 415.] Is he bearing this in mind? I hope that some measures will be taken to help these people along.
Secondly, with regard to Clause 13(1), one of the conditions of the issue of an authorisation is that the person so applying must be the auditor of an exempt private company at 3rd November, 1966. If the Clause is enacted in its present form, what is the position of a partner of a firm of practising accountants where the firm is the auditor of an exempt private company as defined under the principal Act? Is it to be accepted that, where the firm is the auditor, partners who are not members of a body of accountants recognised for the time being under Section 161 should be entitled to receive an authorisation?
It may be that my right hon. Friend is not in a position to give me an answer tonight, but no doubt he will enlighten me in due course. I welcome the Amendment.