External auditors protect shareholders' interests by independently auditing financial statements. Shareholders appoint auditors at the annual general meeting, while management can also appoint an auditor before the meeting to fill any vacancy. Laws govern auditor appointment, qualifications, remuneration, removal and duties to promote auditor independence and competency. Auditors must be chartered accountants and have the right to access records while fulfilling duties like ensuring true and fair financial reporting.
External auditors protect shareholders' interests by independently auditing financial statements. Shareholders appoint auditors at the annual general meeting, while management can also appoint an auditor before the meeting to fill any vacancy. Laws govern auditor appointment, qualifications, remuneration, removal and duties to promote auditor independence and competency. Auditors must be chartered accountants and have the right to access records while fulfilling duties like ensuring true and fair financial reporting.
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External auditors protect shareholders' interests by independently auditing financial statements. Shareholders appoint auditors at the annual general meeting, while management can also appoint an auditor before the meeting to fill any vacancy. Laws govern auditor appointment, qualifications, remuneration, removal and duties to promote auditor independence and competency. Auditors must be chartered accountants and have the right to access records while fulfilling duties like ensuring true and fair financial reporting.
Copyright:
Attribution Non-Commercial (BY-NC)
Available Formats
Download as PPT, PDF, TXT or read online from Scribd
ƥ External audit protect the interest of shareholders.
ƥ Shareholders appoint the auditor in A.G.M. ƥ Management can appoint auditor at any time before A.G.M, to fill the vacancy. ƥ When management not appoint auditor so he is selected by statutory authority. SPECIAL NOTICE OF APPOINTMENT. Reasonable notice should be given to appropriate resolution. ƥ Appoint a person other than retiring auditor. ƥ To fill vacancy in office of auditor. ƥ To re appoint a retiring auditor by directors to fill vacancy. The people who should aware of notice. ƥ Person intended to appoint ƥ Retiring auditor, if applicable. ƥ Auditor who resigned, if applicable. Proper Laws are present for every aspect regarding auditor.
ƥ company legislation according to the companies
ordinance 1984, serves a number of purposes. ƥ Seeks the competency of auditor. ƥ Promotes independence of auditors. ƥ Duties of auditor. ƥ Rights of auditor to help them to carry out their duties. Appointment of auditor
ƥ First auditor should be appointed within 60 days of date of
incorporation.
ƥ If not appointed within these days corporate law authority made
within 120 days. ƥ The casual vacancy for an auditor made by the death or resignation of any auditor. O
ƥ He is unqualified. ƥ In resolution any other person is appointed at that place. ƥ Existing auditor show unwillingness ƥ If auditor is not selected, the company must give notice to authority within one week of its occurrence. ƥ Intimation of appointment to the auditor. ƥQUALIFICATION OF AUDITORS
ƥ Auditor must be the charted accountant, according to
ordinance 1961. ƥ A firm of auditor also form when all partners practicing in Pakistan are charted accountants. ƥ In eligibility of auditor take place when he has some relation with the company directly or indirectly. Remuneration of auditor ƥ Remuneration of auditor is fixed by the company in respect to auditorƞs expense. ƥ It is shown in annual accounts as in profit and loss account or in note form of the company financial statements. ƥ Company donƞt provide resignation of auditor until and unless the agreement is not over. ƥ Auditors canƞt be pressurized for leaving by company. Removal of the auditor
ƥ Appropriate notice should be given as a resolution
for removal of auditor. ƥ Copy of representation. ƥ Auditors may remove if thy offer themselves for re election in A.G.M ƥ Statement of circumstances made by resigning auditor. ƥ If any person or company feels aggrieved in case of removal. He may move to the court. ƥ If management is unhappy so this is the fault of the company that choose auditor without managementƞs choice. Duties of auditor ƥ Compliance with legislation. ƥ True and fair view of accounts as the duties in relation to fraud. ƥ Proper records and returns. ƥ Agreements of accounts to record. ƥ Consistency in information. ƥ To make true and fair report to directors attached to financial statements ƥ Strength of prospectus is checked. ƥ To make report on the declaration of insolvency. Rights of auditor
ƥ Right to lien working papers.
ƥ Right to access all records. ƥ Right to ask any question from management in case of any inconsistency. ƥ Right to attend the meetings and speak in the meetings ƥ Right to be sent by company a copy of notice of intention to propose his removal. Other legal consideration
ƥ Report must be signed by the auditor otherwise he is
not liable for any statement. ƥ If company is manufacturing concern so charted accountant or cost of management accountant is hired. ƥ And in this case cost and management accountants Act 1966(s. 258) is used. Code of corporate governance
ƥ CCG and MCG issued by SECP also deal matter of
internal control system, appointment, resignation and eligibility of auditor. ƥ Establishment of audit committee is responsibility of management. ƥ Composition, members, terms of reference and reporting procedures are salient features of audit committee.