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10. Auditors
10.1 QUALIFICATION, APPOINTMENT AND REMOVAL
Qualification
- Professional qualifications
- Independence and Ethics
Appointment
- Shareholder Approval: The appointment of auditors is generally subject to the approval of the shareholders. The appointment is typically proposed by the board of directors or the audit committee.
- Annual General Meeting (AGM): In many jurisdictions, the appointment of auditors is confirmed or reappointed at the AGM of the company, where shareholders have the opportunity to vote on the appointment.
- Term of appointment: The appointment of auditors is usually for a specific term, typically one year. However, longer terms may be allowed in some jurisdictions, subject to legal requirements and shareholders’ approval.
- Rotation of auditors: Some jurisdictions impose mandatory rotation requirements for auditors to promote independence and fresh perspectives. This means that after a certain period, the company must change its auditors or engage a different audit firm.
Removal
- Resignation: Auditors may voluntarily resign from their position by providing a notice to the company.
- Removal by shareholders: Shareholders have the authority to remove auditors before the expiration of their term.
Regulatory intervention: Regulatory bodies overseeing auditing and accounting practices may have the authority to remove auditors if there are serious breaches of professional conduct, non-compliance with regulations, or other misconduct.