Section 523 | Duty of company to notify appropriate audit authority

(1)This section applies if an auditor is ceasing to hold office—^F1

(a)in the case of a private company, at any time other than at the end of a period for appointing auditors;^F1

(b)in the case of a public company, at any time other than at the end of an accounts meeting.^F1

(1A)But this section does not apply if the company reasonably believes that the only reasons for the auditor's ceasing to hold office are exempt reasons (as to which see section 519A(3)).^F1

(2)Where this section applies, the company must give notice to the appropriate audit authority that the auditor is ceasing to hold office.^F1

(2A)The notice is to take the form of a statement by the company of what the company believes to be the reasons for the auditor's ceasing to hold office and must include the information listed in section 519(3).This is subject to subsection (2C).^F1

(2B)Subsection (2C) applies where—^F1

(a)the company receives a statement from the auditor under section 519,^F1

(b)the statement is sent at the time required by section 519(4), and^F1

(c)the company agrees with the contents of the statement.^F1

(2C)Where this subsection applies, the notice may instead take the form of a copy of the statement endorsed by the company to the effect that it agrees with the contents of the statement.^F1

(3)A notice under this section must be given within the period of 28 days beginning with the day on which the auditor ceases to hold office.^F1

(4)If a company fails to comply with this section, an offence is committed by—

(a)the company, and

(b)every officer of the company who is in default.

(5)In proceedings for such an offence it is a defence for the person charged to show that he took all reasonable steps and exercised all due diligence to avoid the commission of the offence.

(6)A person guilty of an offence under this section is liable—

(a)on conviction on indictment, to a fine;

(b)on summary conviction, to a fine not exceeding the statutory maximum.