Commentary Part 16: Audit Chapter 4: Removal, Resignation, Etc of Auditors Section 522: Duty of auditor to notify appropriate audit authority
798.This section introduces a new obligation on departing auditors to send copies of their leaving statements to an appropriate audit authority as defined in section 525. It contains different rules depending on whether the company the auditor is leaving is classified as a “major audit” as defined in section 525.
799.In relation to major audits, the departing auditor should always send a copy of his statement to the appropriate audit authority. He should do this as the same time as he deposits his statement with the company under section 519. In relation to other audits, the departing auditor is required to send his statement to the appropriate audit authority only if he is leaving before the end of his term of office, meaning only if he has resigned or has been dismissed; and he must do so at the time required by the authority.
800.Subsection (3) provides that where the auditor’s statement to the company said that there were no circumstances that needed to be brought to the attention of shareholders or creditors, that statement must have attached to it a statement of the auditor’s reasons for leaving when sending it to the audit authority.
801.Subsections (5) to (8) set out the offence of failure to comply with these requirements, and the maximum penalties.