Local authority group accounts are part of the accounts produced under the CIPFA Code of Practice on Local Authority Accounting and are subject to audit in line with the NAO Code of Audit Practice. They continue to be part of the statutory audit for which PSAA makes an auditor appointment for opted-in bodies.
Local authority companies are not listed in the Local Audit and Accountability Act as bodies subject to audit under that act. Company audits are subject to the provisions of the Companies Act 2006 and are not covered by the Local Audit (Appointing Person) Regulations 2015 or the scope of PSAA’s specification as the appointing person.
Local authority companies must appoint an auditor themselves in accordance with Companies Act legislation. They can appoint the same audit firm as PSAA appoints to undertake the principal body audit should they wish, for example where this could support an efficient audit process.
The historical requirement to obtain approval for the auditor appointment to a company under the Local Authorities (Companies) Order 1995 no longer applies. The appointment of the company auditor is a matter for the local authority’s governance arrangements, informed by any guidance that CIPFA has produced.