Chapter6 (Compliance with legal requirements') Flashcards
what are appointing authorities for auditor?
1) Bord of directors
2) Members
3) Commision
Circumstances under which board of directors can appoint Auditor.
1) Appointment of first auditor
2) Appointment in case of casual vacancy
3) Appointment in case of mid-term removal
Circumstances under which commission appoint auditor.
1) If directors fail to appoint auditor within 90 days of incorporation.
2) If the members fail to appoint subsequent auditor at an AGM.
3) If the directors fail to fill casual vacancy within 30 days.
4) If disqualified person is appointed as auditor.
5) If appointed auditor is unwilling to act.
who has appointment authority of auditor?
- board of directors
- commission
board of directors’ directors appoint auditor within 90 days of incorporation company.
commission would appoint auditors if board of directors fail to appoint auditor.
who has appointment authority of subsequent auditor?
- members
- commission
subsequent auditor is appointed by members at each AGM.
if members fail to appoint subsequent auditor at an AGM, commission may appoint auditor.
who has appointment authority in case of casual vacancy?
- directors
- commission
Directors: directors have authority to appoint an auditor in case of casual vacancy (i.e., death of sole-proprietor or disqualification during audit)
this should be done within 30 days of occurrence.
commission: commission would appoint auditor if directors fail to appoint auditor within 30 days of occurrence of vacancy.
who has authority to appoint auditor in case of mid-term removal of auditor?
if an auditor is removed before expiry of his term,board of directors shall aappoint the auditor with prior approval of the commission.
what would be the procedure if a disqualified person is appointed by the company?
if a disqualified person is appointed as auditor, this appointment should be void and commission would appoint a qualified auditor in his place.
what would be the procedure if an appointed auditor is unwilling to act.
if an appointed auditor is unwilling to act, commission will appoint auditor.
what would be the tenure of the auditor?
tenure of the auditor is from date of appointment till the conclusion of next AGM.
when auditor would be removed?
- at AGM/retirement.
- before AGM/mid-term removal.
how auditor is removed at AGM?
an auditor is declared retired at AGM and new appointment is made for next period.
how mid-term removal of auditor is done?
an auditor could be removed before his expiry date by members by passing a resolution.
who would fix remuneration of auditor?
remuneration of auditor shall be fixed:
1. by members; or
2. by the board or commission if the auditor is appointed by the board or commission by the case may be.
what would be the procedure of signature of auditor rreport?
if auditor is an individual, reports shall be signed by him.
if auditor is a partnership firm, report shall be signed:
1. by a partner of the firm
2. in the name of firm.
name of engagement partner shall also be mentioned in the report.