1041. Registrar's power to require second audit of a company

(1) This section applies where a person appointed as auditor of a company was not an appropriate person for any part of the period during which the audit was conducted.
(2) The Registrar may direct the company concerned to retain an appropriate person—
(a) to conduct a second audit of the relevant accounts, or
(b) to review the first audit and to report (giving his reasons) whether a second audit is needed.
(3) For the purposes of subsections (1) and (2) a person is "appropriate" if he—
(a) is eligible for appointment as an auditor, and
(b) is not prohibited by section 1034(1) (independence requirement) from acting as auditor of the company.
(4) The company will commit a contravention of these Regulations if—
(a) it fails to comply with a direction under subsection (2) within the period of 21 days beginning with the date on which it is given, or
(b) it has previously committed a contravention under this subsection and the failure to comply with the direction which led to the contravention continues after the contravention.
(5) The company must—
(a) send a copy of a report under subsection (2)(b) to the Registrar of companies, and
(b) if the report states that a second audit is needed, take such steps as are necessary for the carrying out of that audit.
(6) The company will commit a contravention of these Regulations if—
(a) it fails to send a copy of a report under subsection (2)(b) to the Registrar within the period of 21 days beginning with the date on which it receives it,
(b) in a case within subsection (5)(b), it fails to take the steps mentioned immediately it receives the report, or
(c) it has previously committed a contravention under this subsection and the failure to send a copy of the report, or take the steps, which led to the contravention continues after the contravention.
(7) A company who commits a contravention under this section shall be liable to up to a level 4 fine.