Module 9

Question 1

what rights to information does an auditor have?

Answer 1

• right of access
• right to information and explanations
• right to require an subsidiaries to provide them with information

Question 2

what rights to resolutions and meetings does an auditor have?

Answer 2

• right to receive copies of all communications relating to any written resolution
• right to receive notice of any general meeting and attend
• right to be heard at any general meeting

Question 3

what other matters is an auditor required to form an opinion on?

Answer 3

RAPID

Returns have been received from branches not visited
Accounts agree with underlying records
Proper accounting records have been kept
Information and explanations necessary have been received
Directors emoluments and other benefits disclosures are complete

Question 4

How is an auditor appointed?

Answer 4

usually by the shareholders (majority of shareholders agree by vote)
BUT by directors
- any time before the companies first period for appointment
-to fill a causal vacancy
-if the company had taken an exemption but now requires an auditor

Question 5

Who decides the auditors remuneration

Answer 5

The people who make the appointment so usually the shareholders.
Must be disclosed in the financial statements

Question 6

What are the auditors rights against unwarranted dismissal

Answer 6

• if shareholders propose motion to dismiss, auditors are entitled to copy
• right to make written statements and have passed to shareholders
• right to attend AGM

Question 7

What are the auditors rights if they are not re-appointed

Answer 7

rights to make written statements have them distributed to shareholders

Question 8

What must an auditor do to resign

Answer 8

send a letter of resignation and for publicly listed companies, a statement of circumstances

Question 9

What is a statement of circumstances

Answer 9

submitted when auditor resigns
must either state there are no circumstances the shareholders should be aware of or
disclose details of the circumstances

Sent to shareholders and debenture holders
Must also be sent to appropriate audit authority and companies house

Question 10

What is money laundering?

Answer 10

Processing, concealing or dealing with the proceeds of any crime.

Question 11

What are the three principal offences in relation to money laundering?

Answer 11

• concealing or transferring proceeds
• arrangements to facilitate the acquisition, retention, use or control of criminal property
• acquiring using or possessing criminal property

Question 12

Who are regulated sectors in the ML Regulations

Answer 12

• auditors, insolvency practitioners, external accountants and tax advisers
• credit institutions
• financial institutions
• independent legal profess
• trust of company service providers
• estate agents
• high value dealers
• casinos

Question 13

Who is the money laundering reporting officer

Answer 13

nominated officer in an audit firm

Question 14

What are the three areas the ML Regulations cover?

Answer 14

• Risk assessment and controls
• Customer due diligence
• Supervision and registration

Question 15

What are the potential additional offences for those in regulated sectors?

Answer 15

• failure to report

- tipping off

Question 16

What is the risk assessment and controls area of the ML Regulations?

Answer 16

• Risk assessment
• Policies, controls and procedures
• Internal controls
• Training

Question 17

What is the customer due diligence area of the ML Regs?

Answer 17

Evidence o identify clients

Records must be kept fro 5 years

Question 18

What is the supervision and registration area of the ML Regs?

Answer 18

Professional bodies must monitor members

Question 19

when should an auditor be careful not to tip off the client?

Answer 19

• instances of non-compliance
• communication with those charged with governance
• resigning unexpectedly from the audit engagement
• issuing a modified audit report
• delaying the audit report