Companies (Audit, Investigations and Community Enterprise) Act 2004

The Companies (Audit, Investigations and Community Enterprise) Act 2004 (often referred to as the “C(AICE) Act 2004”) is an Act of the Parliament of the United Kingdom. This legislation amended existing company law, focusing on corporate governance, financial reporting, and the regulation of auditors. It also introduced provisions related to community interest companies.

Specifically, the Act addressed issues highlighted by corporate scandals and aimed to improve the quality and reliability of financial information provided by companies. Key provisions included:

• Audit Oversight: The Act established the Professional Oversight Board for Accountancy (POBA) as part of the Financial Reporting Council (FRC). POBA was responsible for overseeing the regulation of auditors and the accounting profession. This involved monitoring the quality of audits and taking enforcement action where necessary. The Act strengthened the independence and objectivity requirements for auditors.

• Investigations: The Act enhanced the powers of the Secretary of State to investigate companies where there were concerns about their affairs. These powers included the ability to appoint inspectors to investigate and report on the company's operations.

• Community Interest Companies (CICs): The Act formally introduced the legal structure of Community Interest Companies. CICs are companies that are designed to benefit the community rather than private shareholders. The Act set out the rules for establishing and operating CICs, including the requirement for an "asset lock" which prevents the company's assets from being distributed to private individuals. CICs are regulated by the Community Interest Company Regulator.

The C(AICE) Act 2004 aimed to promote greater corporate accountability, enhance the transparency of financial reporting, and provide a legal framework for social enterprises. It represents a significant piece of legislation in the development of UK company law.