The companies act 2006 on the statutory framework for auditing

The companies act contains detailed regulations on
the conduct of an audit, the accounting records on which the auditor will work
the financial statements on which they will report and on the auditor’s
relations with the company. The next sections summaries’ the companies act rules
in these areas.

The company’s act 2006 is a codifying act. Before
this act there were several acts in force (those of 1948, 1967, 1876, 1980,
1981, 1985 and 2004.) the 2006 act effectively re-enacted all the parts of the
previous acts which were still in force, so all of the old acts no longer
apply, or at least won’t when all of the provisions of the new act finally come
into force.
The company’s act 2006 has been described as
‘gargantuan’ as it is now said to be the largest piece of legislation ever
passed by parliament, with 1300 sections and 16 schedules. We will deal only
with provisions that affect auditors and the financial statements of the entities
they audit so many other parts of the legislation will not be covered by this
book. Students wishing to immerse themselves in the detail should consult a
specialized company law textbook.
All references are to the company’s act 2006 unless
otherwise stated.

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