Rights, Duties & Liabilities of Auditors in Malaysia (Threats to…
Rights, Duties & Liabilities of Auditors in Malaysia
- Primary statutory source of authority: Companies Act 1965 (latest Companies Act 2016)
- Duties, functions, liabilities and responsibilities of auditors are further defined by MIA
Statutory Requirement for Appointment of Auditors
- S.172(1) and (2): Every company must appoint an auditor at its AGM, to hold office from the conclusion of that meeting until the conclusion of the next AGM.
- New company, may appoint first auditor before the first AGM.
- S.172(10): if an auditor is not appointed or reappointed at the AGM, any member of the company may make an application to the registrar for the appointment of an auditor.
- In cases of disqualification, removal or resignation of auditors, the directors may appoint a new auditor provided the auditor is qualified and has not been previously disqualified from acting as an auditor.
Statutory Requirement for Removal and Resignation
- S.172(4): The company may remove auditor from office at any time by passing a special resolution.
- Public company; must give 14 days notice of removal to RoC.
- Private company; may not be required.
- S.172(14) and (15): Auditors can resign from their post before the expiry of their term, but must give notice of their intention to resign.
- Such notice only effective if it complies with the prescribed requirements of form.
Statutory Rights of Auditor
- Right upon removal
- Representations in AGM
- Attendance at AGM
- Right to remuneration
- Right to Access Information