Chapter 3: APPOINTMENT, REMOVAL, duties and rights of auditors. External audit protect the interest of shareholders. Management can appoint auditor at any time before A.G.M, to fill the vacancy.
Chapter 3: APPOINTMENT, REMOVAL, duties and rights of auditors. External audit protect the interest of shareholders. Management can appoint auditor at any time before A.G.M, to fill the vacancy.
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Chapter 3: APPOINTMENT, REMOVAL, duties and rights of auditors. External audit protect the interest of shareholders. Management can appoint auditor at any time before A.G.M, to fill the vacancy.
Copyright:
Attribution Non-Commercial (BY-NC)
Available Formats
Download as PPT, PDF, TXT or read online from Scribd
ƥ External audit protect the interest of shareholders.
ƥ Shareholders appoint the auditor in A.G.M. ƥ Management can appoint auditor at any time before A.G.M, to fill the vacancy. ƥ When management not appoint auditor so he is selected by statutory authority. SPECIAL NOTICE OF APPOINTMENT. Reasonable notice should be given to appropriate resolution. ƥ Appoint a person other than retiring auditor. ƥ To fill vacancy in office of auditor. ƥ To re appoint a retiring auditor by directors to fill vacancy. The people who should aware of notice. ƥ Person intended to appoint ƥ Retiring auditor, if applicable. ƥ Auditor who resigned, if applicable. Proper Laws are present for every aspect regarding auditor.
ƥ company legislation according to the companies
ordinance 1984, serves a number of purposes. ƥ Seeks the competency of auditor. ƥ Promotes independence of auditors. ƥ Duties of auditor. ƥ Rights of auditor to help them to carry out their duties. Appointment of auditor
ƥ First auditor should be appointed within 60 days of date of
incorporation.
ƥ If not appointed within these days corporate law authority made
within 120 days. ƥ The casual vacancy for an auditor made by the death or resignation of any auditor. O
ƥ He is unqualified. ƥ In resolution any other person is appointed at that place. ƥ Existing auditor show unwillingness ƥ If auditor is not selected, the company must give notice to authority within one week of its occurrence. ƥ Intimation of appointment to the auditor. ƥQUALIFICATION OF AUDITORS
ƥ Auditor must be the charted accountant, according to
ordinance 1961. ƥ A firm of auditor also form when all partners practicing in Pakistan are charted accountants. ƥ In eligibility of auditor take place when he has some relation with the company directly or indirectly. Remuneration of auditor ƥ Remuneration of auditor is fixed by the company in respect to auditorƞs expense. ƥ It is shown in annual accounts as in profit and loss account or in note form of the company financial statements. ƥ Company donƞt provide resignation of auditor until and unless the agreement is not over. ƥ Auditors canƞt be pressurized for leaving by company. Removal of the auditor
ƥ Appropriate notice should be given as a resolution
for removal of auditor. ƥ Copy of representation. ƥ Auditors may remove if thy offer themselves for re election in A.G.M ƥ Statement of circumstances made by resigning auditor. ƥ If any person or company feels aggrieved in case of removal. He may move to the court. ƥ If management is unhappy so this is the fault of the company that choose auditor without managementƞs choice. Duties of auditor ƥ Compliance with legislation. ƥ True and fair view of accounts as the duties in relation to fraud. ƥ Proper records and returns. ƥ Agreements of accounts to record. ƥ Consistency in information. ƥ To make true and fair report to directors attached to financial statements ƥ Strength of prospectus is checked. ƥ To make report on the declaration of insolvency. Rights of auditor
ƥ Right to lien working papers.
ƥ Right to access all records. ƥ Right to ask any question from management in case of any inconsistency. ƥ Right to attend the meetings and speak in the meetings ƥ Right to be sent by company a copy of notice of intention to propose his removal. Other legal consideration
ƥ Report must be signed by the auditor otherwise he is
not liable for any statement. ƥ If company is manufacturing concern so charted accountant or cost of management accountant is hired. ƥ And in this case cost and management accountants Act 1966(s. 258) is used. Code of corporate governance
ƥ CCG and MCG issued by SECP also deal matter of
internal control system, appointment, resignation and eligibility of auditor. ƥ Establishment of audit committee is responsibility of management. ƥ Composition, members, terms of reference and reporting procedures are salient features of audit committee.