AA – Nov 2016 – L2 – Q4c – Regulatory Framework and Audit Responsibilities

Outline the procedures for appointing auditors according to the Companies Act.

Question

Outline the procedures for the appointment of auditors in accordance with the Companies Act 1963 (Act 179). (8 marks)

Answer

First Auditor Appointment: Directors can appoint the first auditor before the first annual general meeting (AGM), or members can appoint one at a general meeting.
Subsequent Appointments: The company must appoint an auditor at each AGM, who will serve until the conclusion of the next AGM.
Casual Vacancy: Directors can fill a casual vacancy, but the appointment holds until the next AGM.
Removal of Auditor: An auditor can be removed by resolution at a general meeting with special notice given.
Registrar Appointment: If no auditor is appointed as required, the Registrar may appoint an auditor upon a written request by a company member.
Reappointment: If no new auditor is appointed at an AGM, the current auditor remains in office unless they decline or are otherwise disqualified.
Nomination Notice: Members can nominate an auditor at least 21 days before the AGM, and the company must inform all auditors of the nomination.
Short Notice for Nomination: If the AGM is called within 21 days of the nomination notice, special provisions apply to ensure the nomination is considered.