Chapter 19 Other Company Officers

Question 1

Is it necessary for public companies to have a company secretary?

Answer 1

Yes

Question 2

Private companies are required to have a company secretary?

Answer 2

False

Question 3

Who play the role of a company secretary in private companies?

Answer 3

Directors or approved person

Question 4

Who determines the duties of a company secretary?

Answer 4

The directors of the company

Question 5

What are the powers of a company’s secretary?

Answer 5

They may enter the company into contracts connected with the administrative side of the company

Question 6

How first auditors are appointed?

Answer 6

The first auditors may be appointed by the directors to hold office until the first general meeting at which their appointment is considered

Question 7

What happen if a person continue to be an auditor after loosing their independence or becoming ineligible?

Answer 7

They are liable to a fine

Question 8

How auditors are reappointed in private companies?

Answer 8

Auditors of private companies are deemed automatically reappointed unless one of the following circumstances apply
1)The auditor was appointed by a director
2)The articles require formal reappointment
3)Members having 5% voting rights serve notice that the auditors should not be reappointed
4)Resolution has been passed that prevents reappointment
5)Directors have resolved that auditors should not be appointed for the forthcoming year(co. is likely to be exempt from audit)

Question 9

Auditors are appointed by ordinary resolution.

Answer 9

True

Question 10

How many days after the meeting auditors hold office?

Answer 10

28 days after the meeting in which the accounts are laid until the end of the corresponding period the next year

Question 11

What is the main prerequisite for eligibility as an auditor?

Answer 11

Membership of a recognised supervisory body

Question 12

What are the requirements of the Act for an auditor?

Answer 12

To hold an appropriate qualification,which means:
1)Have satisfied existing criteria for appointment as an auditor
2)Hold a recognised qualification obtained in the UK
3)Hold an approved overseas qualification

Question 13

How a person become ineligible to be an auditor?

Answer 13

If they are
1)An officer or employee of the company being audited
2)A partner or employee of such a person
3)A partnership in which such a person is a partner

Question 13

Who decides the remuneration of auditors?

Answer 13

Whoever appoints the auditors has power to fix their remuneration for the period of their appointment.It is usual when the auditors are appointed by the general meeting to leave it to the directors

Question 14

What are the duties of an auditor?

Answer 14

To report to members whether the accounts give a true and fair view and have been properly prepared in accordance with the Companies Act.Also
1)Whether the director’s report is consistent with the accounts
2)For quoted companies report to the members on the auditable part of the director’s remuneration report(whether it has been properly prepared in accordance with the Act or not)
3)Sign the report stating their name and date

Question 15

What are the consequences when an auditor knowingly cause their report to be materially misleading?

Answer 15

They commit a criminal offence and may be liable to a fine

Question 16

What are the rights of an auditor?

Answer 16

1)Access to records
2)Information and explanations(from the company’s officers, employees or any other relevant person)
3)Attendance at/ notices of general meetings
4)Right to speak at general meetings
5)Right in relation to written resolutions

Question 17

What if a company’s officer provide wrong information to an auditor?

Answer 17

It is a criminal offence and the penalty is maximum of 2 years imprisonment or fine or both

Question 18

What is the position of the agreement between a company and auditors that seeks to indemnify auditor for their negligence or breach of duty?

Answer 18

That agreement is void

Question 19

For how many years auditor’s liability limitations can stand?

Answer 19

These can only stand for one financial year and must therefor be replaced annually

Question 20

How an auditor can leave the office?

Answer 20

Auditors may leave the office in the following ways:
1)Resignation
2)Removal from office
3)Failing to offer themselves for reelection and
4)Not being reelected

Question 21

What is the procedure for resignation of an auditor?

Answer 21

1)Statement of circumstances(auditor must deposit this where he states either: there are no circumstances which should be brought to members’ and creditor’s attention; or list those circumstances
2)Company action(the co. must send notice of the resignation to the registrar)
3)Auditor rights