GSK seeks first exemption for audit partner signing

GlaxoSmithKline’s May 20th AGM will be asking shareholders to exempt the auditor partner from signing the audit in his or her own name,  the first such case noted by Manifest.

The company says that, ‘For many years, the Company and its legacy companies, together with its employees, have been the focus of protests by various animal protection groups, some of which have engaged in aggressive, abusive and hostile acts. The directors therefore believe that it is appropriate that the Company should seek to utilise the confidentiality afforded to the senior statutory auditor of the Company’s auditors under the new legislation. This resolution therefore seeks shareholder approval for the auditors’ reports for the financial year ending 31st December 2009 to omit the name of the senior statutory auditor. The Company would give notice to the Secretary of State in the appropriate format if this resolution is passed’.

The Companies Act 2006 introduced a requirement (sections 503 to 506) that an audit report be signed by an individual (the senior statutory auditor or audit partner) in his/her own name and date it. The requirement will apply to audit reports on accounts for financial years starting on or after 6 April 2008

However the Act provides for an exception (section 506) from the requirement  if it is reasonably expected that the person could be subject to intimidation or threats as a result of the disclosure of their identity.

The conditions are that the company—
(a) considering on reasonable grounds that statement of the name would create or be likely to create a serious risk that the auditor or senior statutory auditor, or any other person, would be subject to violence or intimidation, has resolved that the name should not be stated, and

(b) has given notice of the resolution to the Secretary of State, stating—
(i) the name and registered number of the company,
(ii) the financial year of the company to which the report relates, and
(iii) the name of the auditor and (where the auditor is a firm) the name of the person who signed the report as senior statutory auditor.

Links:

Auditing Practices Board Bulletin on Audit Reports >>
published April 2009

Companies Act 2006 >>

Leave a Reply