Companies Act 2014 section 1513

Selection procedures for statutory auditors or audit firms by public-interest entities

Section 1513 sets out the formal selection procedures that public-interest entities must follow when appointing a statutory auditor or audit firm, including the role of the audit committee, the content of recommendations, and record-keeping requirements.

• The audit committee must run a formal selection procedure producing a justified recommendation with at least two audit firm choices and a stated preference, confirming freedom from third-party influence
• The directors' proposal to the general meeting must include the audit committee's recommendation, and if the directors depart from the committee's preference they must explain why
• The full selection procedure need not be repeated each year provided it was carried out within the previous nine financial years and the same auditor or firm is being reappointed
• Records demonstrating compliance with the selection procedures must be retained for at least six years, and failure to do so is a category 4 offence

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