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Company Auditors - Coggle Diagram
Company Auditors
Auditors report
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Report must state
- Whether a/c are (in his opinion) properly prepared in accordance to the act
- Whether a/c records & registers required to be kept by co are properly kept
[ In case of consolidated account ]
- Name of subsidiary of he has NOT act as auditor
- Whether he has considered the a/c & auditor's report
- Reasons of not being satisfied
- Any irregularity in accounts/ consolidated account & any matter not set out in accounts
- Discovers any breach/ non-observance of provisions of CA2016
- Write report to ROC, if they believes that the issue hasn't been addressed properly in their report/ by informing the co's board
- Write report to ROC, if they suspect serious fraud in public co/ controlled co
- Send copy of F/S & audit report to every trustee within 7 days after furnishing the corporation of the same doc (F/S & auditor report)
- Report if they believe something is important for co;s legal obligation
- Public listed co, auditor need to inform SC in writing, if there's a breach/ non-performance of any provisions of securities laws, which may adversely affect financial position of the listed co
Appointment
First auditor
Public
- Directors appoint by circular resolution before first AGM
- Auditors appointed hold office until conclusion of meeting
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Private
- BOD appoint auditor at least 30 days before end of period for the submission of the first F/S to ROC
- F/S are circulated to members within 6 months after y/e
Subsequent auditor
Public
- Members appoint at AGM
- Holds office until conclusion of next AGM
- No provision of auto re-appointment
- Appointment is on yearly basis
Private
- Auditor is auto re-appointed
- Unless members passed resolution that auditor shouldn't be re-appointed
Remuneration
If appointed by director, remuneration fixed by director
- If appointed in GM, remuneration fixed by co in GM
- usually co authorize directors to fix
- 5% of total members, or
- 5% (in nominal value) of issued share capital
If they require particulars of all remuneration paid to auditors in respect of services other than auditing services rendered to the co
Co must:
- Prepare statement showing particulars of all remuneration paid in respect of payment made for financial year immediately preceding notice date
- Forward copy of statement to those members entitled to receive notice of GM
- Lay the statement before the co in GM
Resignation
- Give notice in writing
- End his term of office after 21 days' from notice date/ date specified om notice
- Co must send a copy of the notice to ROC within 7 days
If it's public co, auditor may require the co to:
- Statement of circumstances leading to his resignation
- Call for EGM, enabling him to explain reason of resignation
- Circulate Statement in (1)
- Hold members' meeting within 28 days (special notice)
- Give ROC a copy of Statement in (1)
Qualification of auditor
- Approval (renewable every 2 years) from Minister of Finance & must have necessary qualification
- Member of & registered as a chartered accountant with MIA
- Must not be indebted to co > RM25,000
- Must not be:
- Officer of co/ related corporation
- Partner/ emee/ emer of an officer of the co
- Emee/ partner of an emee of an officer of co
- Convicted any offence of fraud/ dishonesty (punishable with imprisonment for 3 months)
- Undischarged bankrupt
- Shareholder, or spouse is shareholder of co
- Responsible for keeping register f members/ register of debentures of co
- Spouse cannot be emee of co
- Partnership firm may be appointed as auditor's in the firm's name
- Appointment is recognized as appointment of all partners as joint auditors
- Every partner of the firm must be individually be an approved co auditor
Removal of auditor
- Give special notice (28 days)
- Co send copy of notice to auditor concerned & to registrar
- Within 7 days of receiving notice, auditor make written representation
- Auditor may require written resolution to be read ot at meeting
- Copy of auditor's written resolution must be forwarded to Bursa Malaysia & sent to members
- Pass ordinary resolution in EGM
- Pass special reslution to appoint new auditor immediately in the same EGM
if there's no nomination of auditor, the meeting will be adjourned to date not earlier than 21 days and not later than 30 days
At adjourned meeting, ordinary resolution will be passed to appoint new auditor, by a notice of 10 days before resume of adjourned meeting
Duties
- Carry out investigation to form opinion to proper a/c record
- Ensure books shows true financial position
- Ensure errors aren't made (errors of computation/ omission/ untruths)
- Report irregularities discovered to management/ ROC
- Form opinion to whether he has obtained all info & explanations he required, whether a/c record & registers of co have been kept in accordance to Act
- State deficiency in report
- Exhibit reasonable degree care & skill in performance of his duties
- Reply on co's own internal control system, provided he had previously made investigation into the system (establish its strength/ weakness & made test of system, to ensure effciency)
- Make full investigation into suspicious entries
- Delegate functions to subordinates, but have to take the risk that they may not be competent/ careful
Powers
- Right to access co's registers & records
- Require info & explanation as they think necessary for performance of their duties
- Attend general meeting
- Obtain any info about co's subsidiary
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