An auditor of a private company must be appointed for each financial year of the company, unless the directors resolve otherwise on the grounds that audited accounts are unlikely to be required.

For each financial year for which an auditor is appointed (other than the company's first financial year), the appointment must be made before the end of the period of 28 days beginning with the end of the time allowed for sending out copies of the company's annual accounts for the previous financial year end, or if earlier, the day on which copies of the company's annual accounts for the previous financial year are due to be sent out.

Auditors are generally appointed by the members to whom they report by ordinary resolution while directors have the power to appoint auditors at any time before the company's first period for appointing auditors; following a period during which the company (being exempt from audit) did not have any auditor, at any time before the company's next period for appointing auditors; or to fill a casual vacancy.

The auditor is responsible for making a report to the company's members on all accounts of the company. The auditors' scope of work as required by the Companies Act requires them to report whether, in the auditors' opinion the annual accounts give a true and fair view of the balance sheet and profit and loss account and that the accounts have been properly prepared in accordance with the relevant financial reporting framework including international accounting standards and the requirements of the Act. In making the auditors report the auditor is required to comply with statutory obligations such as will enable him to form an opinion as to:

• whether adequate accounting records have been kept by the company and returns adequate for their audit have been received from any branches not visited by him, and
• whether the company's individual accounts are in agreement with the accounting records and returns, and
• in the case of a quoted company, whether the auditable part of the company's directors' remuneration is in agreement with the accounting records and returns.