Auditors

Question 1

Explain the term Auditors

Answer 1

An auditor is appointed to prepare an independent report on the financial affairs of the company and present it at the AGM

Question 2

Who is disqualified from being an auditors ?

Answer 2

• Officers/servants of the company
• Relatives of a company officer
• Partner of company officer or another person in their employment
• Persons disqualified by the court
• A corporate body

Question 3

How is an auditor appointed ?

Answer 3

First Appointment
By directors before first AGM
Subsequent Appointments
May be automatically re-appointed by shareholders at first AGM
Remain in office until next AGM Directors may fill a casual vacancy

Question 4

What happens if there is a failure to appoint an auditor ?

Answer 4

Minister must be notified within one week
ODCE can appoint an auditor (failure to notify = category 3 offence)

Question 5

Wh are exempted from making audits ?

Answer 5

Small companies
earn less than 8.8 million
Balanc sheet doesnt exceed 4.4 million
Doment companies

Question 6

List the rights of auditors

Answer 6

1. Access to accounting records
2. Ask questions to relevant persons and receive explanations 3. Information and explanations on subsidiaries
3. Attend general meetings (notice and info regarding same) 5. Speak at general meetin

Question 7

List the duties of an auditor

Answer 7

To provide a report
To act with professional integrity
In compliance with the ethical code of their regulatory authority
To act with reasonable care and skill
To the standard of a reasonably competent, careful and cautious auditor Re Kingston Cotton Mill (No. 2)(1986)
Re Thomas Gerard and Son Ltd (1967

To report indictable offences
Category 1 and 2 offences reported to the Director of Corporate Offences
To report failure to keep proper books of accounts
In writing to the company
Within 7 days notify the Registrar of Companies (unless remedial action taken)

Question 8

Explain the term liability of Auditors

Answer 8

Owes a duty of care in contract and in tort
Re Thomas Gerard and Son Ltd (1967)

Auditors found liable for producing a report based on falsified stock figures

Question 9

How is an auditor removed from their position ?

Answer 9

rdinary resolution at a company meeting
Extended notice required (28 days)
Copy of proposal to the auditor
Right to make representations to shareholders and have theses circulated prior to the meeting
If not circulated then have them read out at the meeting Resolution passed= notify the CRO within 14 days

Question 10

How does an auditor resign ?

Answer 10

By notice in writing to the company’s registered office
Forward by the company to CRO within 14 days and to the Irish Auditing and Accounting Supervisory Authority (IAASA) within 30 days
Should include a statement of circumstances:
That there are no circumstances that auditor is aware of that should be brought to attention of members or creditors
That there are circumstances that auditor believes should be brought to attention of members or creditors and an explanation of these.

Question 11

Explain the term Company Secretary

Answer 11

Submission of prescribed form with company constitution to CRO, thereafter by appointment by the board
Cannot be a minor, an un-discharged bankrupt, a restricted /disqualified person
Company Secretary role revolves around corporate compliance
* Must ensure that all documents lodged with CRO are lodged in an appropriate and timely manner
* Attend board meetings, AGMs, EGMs and record minutes