Section 499 states:
(1) The auditor
of a company-
of a company-
(a) Has a right
of access at all times to the company’s books, accounts and vouchers, (in
whatever form they are held), and
of access at all times to the company’s books, accounts and vouchers, (in
whatever form they are held), and
(b) May require any of the following persons to provide
him with such information and
him with such information and
explanations as he thinks necessary for the
performance of his duties as auditor.
(2) Those
persons are-
persons are-
(a) Any officer
or employee of the company;
or employee of the company;
(b) Any person holding or accountable for any of the
company’s books, accounts or vouchers;
company’s books, accounts or vouchers;
(c) Any subsidiary undertaking of the company which is
a body corporate incorporated in the united kingdom;
a body corporate incorporated in the united kingdom;
(d) Any office, employee or auditor of any such
subsidiary undertaking;
subsidiary undertaking;
(e) Any person who fell within any of paragraphs (a) to
(d) at a time to which the information or explanations required by the auditor
relate.
(d) at a time to which the information or explanations required by the auditor
relate.
This section gives the auditors some very powerful
rights. They have a right of access at all times to the company’ books,
accounts and vouchers in whatever format they are retained by the company. This
recognizes the fact that many companies maintain their books and records in electron’s
formats.
rights. They have a right of access at all times to the company’ books,
accounts and vouchers in whatever format they are retained by the company. This
recognizes the fact that many companies maintain their books and records in electron’s
formats.
A whole range of people are put under an obligation
by sub-s (2) to provide the auditors with information and explanations. These
range from officers and employees of the company itself through officers and
employees working for subsidiary companies, which either still works there or
who have left the company but who worked there during the period for which the
auditors are asking for information. This duty to disclose information also
extends to anybody who doesn’t work for the company directly but is concerned
in maintaining the books and records.
by sub-s (2) to provide the auditors with information and explanations. These
range from officers and employees of the company itself through officers and
employees working for subsidiary companies, which either still works there or
who have left the company but who worked there during the period for which the
auditors are asking for information. This duty to disclose information also
extends to anybody who doesn’t work for the company directly but is concerned
in maintaining the books and records.
This would cover a situation where, for example, a
company has outsourced part of its accounting. The most common aspect of
outsourcing is payroll and, in such a situation, the company which prepares the
payroll is covered by this section and has to disclose information to the
auditors.
company has outsourced part of its accounting. The most common aspect of
outsourcing is payroll and, in such a situation, the company which prepares the
payroll is covered by this section and has to disclose information to the
auditors.
In the same way s 500 gives the auditors similar
rights to information from overseas subsidiaries, (i.e. a subsidiary company
not incorporated in the United Kingdom), and persons connected with it as
defined in sub-s (2) above.
rights to information from overseas subsidiaries, (i.e. a subsidiary company
not incorporated in the United Kingdom), and persons connected with it as
defined in sub-s (2) above.
Section 501 states (in part):
A person commits an offence who knowingly or
recklessly makes to an auditor of a company a statement (oral or written) that-
recklessly makes to an auditor of a company a statement (oral or written) that-
(a) Conveys or
purpose to convey any information or explanations which the auditor requires,
or is entitled to require, under section 499, and
purpose to convey any information or explanations which the auditor requires,
or is entitled to require, under section 499, and
(b) Is
misleading, false or deceptive in a material particular.
misleading, false or deceptive in a material particular.
This section is designed to punish individuals who
deliberately set out to mislead the auditors and knowingly supply them with
false information.
deliberately set out to mislead the auditors and knowingly supply them with
false information.
The penalties for doing so are set out in sub-s (2)
and include a term of imprisonment and/or a substantial fine.
and include a term of imprisonment and/or a substantial fine.
