Companies Act 2014 section 1541

Internal organisation of statutory auditors and audit firms

Section 1541 sets out the organisational requirements that every statutory auditor and audit firm must have in place to ensure audit quality, independence, and effective internal controls.

• Auditors and audit firms must establish policies to safeguard independence, maintain robust administrative procedures, internal quality controls, and risk assessment processes
• Staff involved in audit work must have appropriate knowledge and experience, and outsourcing of important audit functions must not undermine quality control or regulatory oversight
• Remuneration policies must incentivise audit quality, and revenue from non-audit services to a client must not influence the pay or performance evaluation of anyone involved in that client's audit
• The internal quality control system must be reviewed annually, with findings recorded, and the auditor or firm must be able to demonstrate to the relevant authority that its policies are proportionate to the scale and complexity of its activities

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