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Section 485A: Appointment of auditors of private company: additional requirements for public interest entities with audit committees

Companies Act 2006 · 2006 c. 46View on legislation.gov.uk

Part 16: Audit — Chapter 2: Appointment of auditors

This section applies to the appointment under section 485(4) of an auditor or auditors of a private company—

which is also a public interest entity; and
which has an audit committee.

But it does not apply to the appointment of an Auditor General as auditor or one of the auditors of the company.

Before an appointment to which this section applies is made—

the audit committee of the company must make a recommendation to the directors in connection with the appointment, and
the directors must propose an auditor or auditors for appointment ...

Before the audit committee makes a recommendation or the directors make a proposal under subsection (3), the committee ... must carry out a selection procedure in accordance with Article 16(3) of the Audit Regulation , unless the company is a small or medium sized enterprise within the meaning in Article 2(1)(f) of Directive 2003/71/EC .

The audit committee must in its recommendation—

identify its first and second choice candidates for appointment, drawn from those auditors who have participated in a selection procedure under subsection (4),
give reasons for the choices so identified,
state that—
the recommendation is free from influence by a third party, and
no contractual term of the kind mentioned in Article 16(6) of the Audit Regulation has been imposed on the company.

The directors must include in their proposal—

the recommendation made by the audit committee in connection with the appointment, and
if the proposal of the directors departs from the preference of the audit committee—
a recommendation for a candidate or candidates for appointment drawn from those auditors who have participated in a selection procedure under subsection (4), and
the reasons for not following the audit committee's recommendation.

Where the audit committee recommends re-appointment of the company's existing auditor or auditors, and the directors are in agreement, subsections (4) and (5)(a) and (b) do not apply.

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This legislation text comes from legislation.gov.uk. Contains public sector information licensed under the Open Government Licence v3.0. These source and reuse terms cover the legislation text, not Remedy's commentary.

Reuse reviewed 21 August 2026 under Open Government Licence v3.0.