§ Mr. Austin MitchellTo ask the Secretary of State for Trade and Industry whether he will seek to introduce legislation to define the meaning of auditor independence.
§ Mr. RedwoodSection 27 of the Companies Act 1989 (which we expect to bring into force early next year) sets out connections between a person and a company which render the person ineligible for appointment as auditor to the company on the grounds of a lack of independence. The Secretary of State will consider whether to exercise the power in section 27(2) to specify by regulations further disqualifying connections once it is clear what professional rules and guidance there will be governing the independence of auditors. Under the 1989 Act the Secretary of State cannot recognise a supervisory body for auditors unless it appears to him to have adequate rules and practices in respect of professional integrity and independence.