Module 9 Auditor Responsibilities - legislations Flashcards
What are the rights of an Auditor under the Companies Act 2006?
The right to receive information:
The right of access at all times to the company’s books, documents and supporting records;
to require any directors or employees of the company to provide the necessary information and explanations;
the right to require any subsidiaries incorporated in the UK to provide any additional information
Rights in relation to resolutions and meetings:
The right to receive copies of communications for any written resolution by the company
The right to receive all notices of general meetings and attend such meetings
The right to be heard at any general meeting on any part of the busienss which concerns them as auditor
What are matters reported by exception?
The auditor is also required to form an opinion about serval other matters: (RAPID)
Returns have been recevied from branches not visted by the auditor
Accounts agree with the underlying records
Proper accounting records have bene kept
Information and explanations necessary for the purposes of audit have been received
Directors’ emoluments (salary, bonuses and pensions) and other benefits disclosures are complete
External auditors are usually appointed by shareholders (>50% of vote), what are the situations that Directors can appoint auditors?
Any time before the company’s first period for appointing auditors (first time a company requires an auditor)
To fill a casual vacancy (if an auditor resigns during the term of office)
If they previously had an audit exemption and have now lost it
How are auditors re-appointed?
Public companies - an auditior is appointed/re-appointed at each AGM by the shareholders
Private companies - Automatic re-appointment unless 5% or more of shareholders object. Companies articales of association may also prohibit automatic re-appointment.
How are auditor’s fees fixed?
The audit fee is fixed by whoever makes the appointment
When can an auditor be removed during term of office?
Auditor can be removed at any time. Shareholders do this by passing na ordinary resolution.
What are auditors’ rights to protect against unwarranted dismissal?
A copy of motion of removal must be sent to auditors
Auditors has a right to make written statements regarding their removal and have these passed to the shareholders
Auditor retains the right to attend the normal AGM of company in the year in which they are removed
When an auditor resign, what are they required to send?
A letter of resignation and where the company is a public interest company, a statement of circumstances
Auditors of non public interest companies must provide a statement of circumstances unless specific exemptions apply (exempt from audit, being wound up, auditor cease to hold office at end of term)
Auditor may request that a General meeting is called for the purpose of considering the circumstances connected with the resignation
What must a statement of circumstances do?
It must either
Assert that there are no circumstances connected with the departure from office that in the auditors opinion, the shareholders and creditors of the company should be made aware of
OR
Disclose details of such circumstances
Where must the statement of circumstances be sent to?
Registed office of company (shareholders and debenture holders, non-public interest companies with no details to disclose can miss this step) FRC (for public interest companies) Recognised supervisory body (non-public interest companies) Companies house (unesless the company obtains court order to prevent this, non-public interest companies with no details to disclose can miss this step)
What is concealing or transferring the proceeds of criminal conduct?
A person commits an offence if they conceal, disguise, convert or transfer criminal property. It is also an offence to remove criminal property from the UK.
What is arrangements to facilitate the acquisition, retention, use or control of criminal property?
A person commits an offence if they enter into or become involved in an arrangement which they know, or suspect facilitates the acquisition, retention, use or control of criminal property by or on behalf of another person.
What is acquiring, using or possessing criminal property?
A person commits an offence if they acquire, use or possess criminal property. An exception to this offence relates to property acquired for adequate consideration (to protect someone who has inadvertently been sold criminal property)
What businesses are regulated sectors for Money Laundering regulations?
Auditors, insolvency practitioners, external accountants and tax advisers Credit institutions financial institutions independent legal professionals trust or company service providers estate agents high value dealers casinos
What are the three areas that ML regulations cover?
Risk assessment and controls
Customer due diligence
Supervision and registration
