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Chapter 04 - Regulation of Auditors - Coggle Diagram
Chapter 04 - Regulation of Auditors
Eligibility to act as auditor
Pass an approve set of exams set by a recognized qualifying body (RQB)
Become a member (and stay a member) of a recognized supervisory body (RSB)
Must not be either of:
A director or employee of the client or its associated companies
A business partner or employee of the client or its associated companies
Duties of auditors: Auditors must consider
Maintenance of proper and adequate accounting records
Compliance with legislation
Verification of records
Truth and fairness
Adequate disclosure
Rights of external auditors
Right of access
Right to require info and explanations from officers
Right to attend any general meetings
Right to be heard at any general meetings
Right to request info and explanations from subsidiaries (in case of holding company)
Right to make written representation when company appoint other auditors other than them
Right to request EGM in case of resignation
Right to give notice in writing require general meetings for laying accounts
Responsibilities of directors
Safeguard the assets of company
Keep accounting records for auditors
Preventing fraud, errors, irregularities
Prepare financial statements
Lay copies of annual account before members at AGM
File a copy of accounts with Registrar of Companies
Appointment, removal, and resignation of auditors
Appointment
Usually by shareholders at AGM
Directors may be allowed to appoint, in case of newly-formed company or to fill a casual vacancy
Appointed auditors will hold office till next AGM
If shareholders and directors doesn't appoint auditor, a gov department may do that.
Remuneration of auditor is set by whoever appoint them.
Removal of auditors
Directors can't remove auditors themselves
Auditors can be removed by majority at GM
They are allowed to speak at GM
Deposit at company a statement of circumstances
Process of producing ISAs
Research and consultation
Transport debate
Exposure for public comments (min. 120 days)
Consideration of comments
Affirmative approve (2/3 members)