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CHAPTER 2 - Coggle Diagram
CHAPTER 2
Resignation
Procedures
Statement of circumstances
Quoted companies/ public interest entities
Must always be submitted
Non- public interest entities
Certain exemptions may apply
Written notice
Notice of resignation
Company to regulatory authorities
Statement of circumstances
Auditors to regulatory authorities
Company to everyone entitled to receive a copy of accounts
Convening of general meeting
Auditors may require directors
Statement prior to GM
Auditors require company circulate SOC to everyone entitled to notice of meeting
Other rights
Receive all notice
GM at which their term of office would have expired
GM where casual vacancy caused by their removal is to be filled
Can speak at these meetings on matter that concerns them as auditors
IFAC
What is it
Non-profit
Non-govermental
Non-political
International organisation of accountancy bodies
Council
Board
Committees
IAASB
Set high-quality auditing (ISAs) and assurance (ISAEs) standards
Facilitates governance of international & national standards
Strengthen public confidence in profession
Carries out IFAC's work programme
Supervises IFAC's work programme
Elects members of Board
Determines financial contributions
Mission
Serve public interest
Strengthen global accountancy profession
Contribute to development of strong international economies
Establishing & promoting adherence to high-quality professional standards
Furthering international convergence of such standards
Speaking out on public interest issues where profession's expertise is most relevant
Memberships
Accountancy body may join IFAC
If it is recognised by law
If it is recognised by general consensus within its own country
Substantial national organization of good standing
Members of IFAC
Automatically becomes members of IASCF
Council
One representative from each member body of IFAC
Elects members of the Board
Establish financial contributions by members
Board
President
Not more than 22 members elected by Council
For 3-year term
Elections are held annually
1/3 retires
Supervise work of IFAC
Work programme implemented by smaller working group
IAASB
Standards & statements on auditing, assurance
Develop
Issue
18 members
Nominated by IFAC Board
Objectives
Serve public interest
By setting high-quality AA standards
Faciliting convergence of international & national standards
Enhancing quality & uniformity of practice throughout the world
Strengthening public confidence in global AA profession
Achieve these by
Establish high-quality auditing standards & guidance
FS audits
Generally accepted
Recognised by stakeholders
Other types of assurance service
Financial matters
Non-financial matters
Related services
Quality control
Scope of services addressed by IAASB
Publishing other pronouncement on AA matters
Advancing public understanding of roles & responsibilities of professional AA service providers
Scope & authority
Do not override local laws or regulations
Two categorise
ISAs
IASEs
IAASB communicate with FRC (National standard setters)
Development
Research & consultation
Transparent debate
Exposure for public comment
Consideration of comments
Affirmative approval
2/3 of IAASB members
Status of ISAs
National standards may exist but aligned with ISAs
ISA can be adopted without additional guidance relating to national circumstances
ISA could be adopted but with specific guidance added
Removal
Representations
Why they ought to stay in office
Can require co. to state in notice
Send a copy of notice to members
Resolution passed
Company must notify regulatory authority
Auditors must deposit statement of circumstances at co's registered office
within 14 days from ceasing to hold office
Statement must be sent to regulatory authorities
Notice of removal
Either
Special notice
Copy sent to auditors
Written resolution
Directors must convene a meeting within reasonable time
Auditor's rights
Receive notice of and speak at
GM at which their term of office would have expired
GM where casual vacancy caused by their removal is to be filled
Audit
Statutory concept
Required by statute (law)
Exception
Small companies
Based on
Revenue at year end
Total assets at year end
Subject to regulations
National legislation
National regulation & standard setting
International standard setting
Professional bodies eg. ACCA
Appointment
Shareholders
Appoint auditors
Auditors answerable to them
3 ways
Members (shareholders)
During period of appointing auditors
Directors failed to do so
Secretary of State
Members failed to do so
Directors failed to do so
Directors
B4 co's 1st period for appointing auditors
To fill casual vacancy
Appointed for each financial year
Unless directors indicate that audited FS not required
Remuneration
Include auditor's expenses
Will be fixed by whoever made appointment
Disclosed in annual FS
In many countries
Auditors rights & duties
Often set out in law
CA 2006 (UK)
Rights
Access books & records
Receive info & explanations
If false, misleading, deception info
Officer commits an offence
Receive notice of GM to attend meeting
Speak at GM on matters that concern them
Receive a copy of written resolution proposed
Duties
Report opinion on
FS
Whether it is being fairly presented
Additional statutory requirements
Ensure FS agree to records
Ensure consistency of other info
Maintain adequate records & returns
Ensure disclosure of directors' benefits
Adhere to local laws
Regulation by profession
Education & training of auditors
Implementation & enforcement of ethical requirements