§ Mr. Austin MitchellTo ask the Secretary of State for Trade and Industry if he will seek to legislate to require auditors of companies actively to evaluate and seek evidence relating to the post balance sheet events occurring between the date of the audit report and the following annual general meeting.
§ Mr. RedwoodNo.
§ Mr. Austin MitchellTo ask the Secretary of State for Trade and Industry (1) if he will seek to legislate to require company auditors to alert the users of financial statements of the likelihood of financial insolvency;
(2) whether he will seek to legislate to require auditors to report on the financial soundness of companies.
§ Mr. RedwoodNo. The auditors' duty is to report to members of the company. There is a presumption under the accounting principles set out in the Companies Act 1985 that the company is carrying on a business as going concern. Auditing standards already prescribe that where there are doubts about the company's ability to continue as a going concern auditors should qualify their report appropriately.
§ Mr. Austin MitchellTo ask the Secretary of State for Trade and Industry whether he will seek to amend schedule 12 to the Companies Act 1989 so as to discourage organisations seeking recognition as qualifying bodies from using objective tests to further theoretical knowledge.
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§ Mr. RedwoodNo.
§ Mr. Austin MitchellTo ask the Secretary of State for Trade and Industry whether he will seek to amend the Companies Act 1989 so as to require the supervisory bodies to provide tangible proof to any member of the public showing that they have taken active steps to monitor compliance with the rules on auditor independence.
§ Mr. RedwoodNo.
§ Mr. Austin MitchellTo ask the Secretary of State for Trade and Industry whether he will seek to legislate to require auditors of all large companies to report on the effectiveness with which a company utilises its assets.
§ Mr. RedwoodNo. It is the auditors' function to report on the company's annual accounts. It is for others to judge from those statements the performance of the company.
§ Mr. Austin MitchellTo ask the Secretary of State For Trade and Industry whether he will seek to legislate to require company auditors to report all departures from the Companies Acts.
§ Mr. RedwoodNo. It is already a requirement of the Companies Act 1985 that the auditors' report shall state whether in the auditor's opinion the annual accounts have been properly prepared in accordance with the Act. There is professional guidance on how the auditor should report departures from statutory requirements.
§ Mr. Austin MitchellTo ask the Secretary of State for Trade and Industry if he will provide a list of the organisations which have written to him either supporting or opposing the implementation of section 15 of the Companies Act 1989.
§ Mr. RedwoodA number of detailed comments were received in response to my Department's recent consultative document on a draft of the regulations to implement section 15 of the Companies Act 1989. None, however, raised the question whether or not the provision should be implemented.