Rules and regulations

Question 1

Who can act as an auditor

Answer 1

• A member of a Recognised Accountancy Body approved by the Supervisory Authority (IAASA)
• Hold an appropriate qualification from that recognised body to undertake an audit.

Question 2

Who is not eligible to act as auditor

Answer 2

• persons who have links with the company being audited
• undischarged bankrupt
• persons who are the subject of a disqualification order

Question 3

Appointment of auditors

Answer 3

1) By Members - on vote

2) By Directors - before the first AGM, subject to vote at that AGM

Question 4

Remuneration of auditors

Answer 4

1) By Members - most cases

2) By Directors - when appointed by the,

Question 5

Auditors duties

Duty to provide an audit report - DETAILS

Answer 5

1) To audit the FS of a company and to provide an opinion whether the FS give a true an fair view
2) To confirm that the FS are properly prepared in accordance with the relevant financial reporting framework, law and regulations
3) To confirm they received all information and explanations necessary for the audit
4) To confirm that the records were sufficient to permit the FS to be audited
5) To confirm if the information given was consistent with the FS
6) To confirm if the FS were consistent with the accounting records and returns

Question 6

Auditors duties

Answer 6

1) Duty to provide an audit report
2) Duty to Report Failure to Keep Adequate Accounting Records
3) Duty to Report Category 1 and Category 2 Offences
4) Duty to Exercise Professional Integrity
5) Duty to Furnish Evidence of Approval to the Director of Corporate Enforcement

Question 7

Auditor duties

2) Duty to Report Failure to Keep Adequate Accounting Records - DETAILS

Answer 7

• must serve notice to inform the company of that opinion
• if directors take no action, auditors inform CRO and CRO inform DCE
• obligation to make a report on this matter to the Office of the Director of Corporate Enforcement.

Question 8

Auditors duties

Duty to Report Category 1 and Category 2 Offences -DETAILS

Answer 8

• must notify that opinion to the DCE
• provide the Director with particulars of the grounds on which they have formed that opinion (and access to information and supporting documents)

Question 9

Auditors duties

Duty to Exercise Professional Integrity

Answer 9

• must exercise the skill, care and caution of a reasonably competent, careful and cautious auditor.
• principles of professional ethics in place, covering at least their public interest function, their Integrity, objectivity, professional competence and due care.

Question 10

Auditors rights

Answer 10

1) Right to access to the company’s books
2) Right to receive information and explanations
3) To receive notice of general meeting
4) To be heard to meetings on matters of concern to the auditors
5) To receive copies of written resolutions

Question 11

Resignation of an auditor

Answer 11

• serve notice of intention to resign and mention the circumstances that should be brought to attention of the members or creditors, if any.