Rules & Regulations Flashcards
who imposes rules
Government
who imposes regulations
Other bodies except the government
which companies require an audit
Listed entities & entities operate under financial industry
who is eligible to be an auditor
a member of the recognised supervisory body
someone directly appointed by the state
who are excluded to be an auditor
by law: those who manage & have close ties with the company ( directors,key customers, key suppliers,key managerial personalities)
by codes of ethics:threat to independance & objectivity(family relationship,attached to client more than 7 years)
who could appoint auditors
members/shareholders- at the AGM
Directors- first auditors & to fill casual vacancies
Secretary of the state- if no one appoints
what is the notice period for listed companies for an AGM
28 days
what are the circumstances where the auditor can be removed from position
if the independance is not secured( auditor cannot work for more than 7 years for the same client)
if a fraud is found
if there are doubts with the competence level
what are the procedures taken in removal of the auditor
- takes place due to a majority at a general meeting.
- a specified notice period should be provided.
- auditors can circulate representations stating why they should not be removed if applicable.
- a statement of circumstances should be sent to the company and the regulatory authority to set out issues surrounding the cessation.
What are circumstances where the auditors may resign
when they find difficult to work with the management(ex:management integrity issue,management fails to perform their duties)
what are the rights during appointment as an auditor
- able to access company books & records
- receive information & explanations relevant to audit from the client
- to receive notice & attend the AGM
- to be heard about the matters of concern to the auditor
- to receive copies of written resolutions of the company
what are the rights on removal/resignation
- request in the general meeting to explain the circumstances of resignation
- request companies to circulate notice of circumstances relating to resignation/removal
what are the duties of an auditor
providing a true & fair opinion on the F/S
should comply with the quality control standards to ensure audit effectively & efficiently
Can national standard setters produce their own standards
yes, they may develop their own auditing & ethical standards by modifying ISA’s to suit the nation
at an instance where there is a conflict between local standards and ISA’s which regulation do you apply
Local
