AUDITOR APPOINTMENT ,RIGHTS AND DUTIES.pptx

AUDITOR APPOINTMENT

1. AUDITOR MODES OF APPOINTMENT OF COMPANY AUDITOR RIGHTS DUTIES

2. Types of Auditors Internal Auditor : Audits the company’s internal processes, risk management, and controls External Auditor : Audits the company’s financial statements to ensure accuracy and compliance with standards Statutory Auditor : Appointed by the shareholders to comply with statutory requirements

3. Modes of Appointment of a Company Auditor Appointment by Shareholders : The company’s shareholders appoint an external auditor in the annual general meeting (AGM). The appointment is subject to approval and ratification by shareholders. In some countries (e.g., India), auditors are appointed for a term of 5 years. Appointment by the Board of Directors Interim Appointment : If a vacancy arises between AGMs (e.g., resignation of the previous auditor), the board can appoint an interim auditor. This appointment is subject to approval in the next AGM.

4. Modes of Appointment of a Company Auditor Appointment by the Government or Regulatory Authorities In some cases, the regulatory authority or government body can appoint an auditor for a company if shareholders fail to do so. The appointment may occur in special circumstances, such as company mismanagement or fraud.

5. Modes of Appointment of a Company Auditor Right to Access Books and Records : The auditor has the right to examine the company’s books, records, and documents necessary for the audit. Right to Obtain Information : The auditor can request information from directors and employees to verify financial details and assess internal controls. Right to Attend AGM : The auditor has the right to attend the annual general meeting (AGM) and express opinions on the company’s financial statements. Right to Report to the Shareholders : The auditor has the right to submit an audit report, which includes a statement on the company’s financial health and whether the accounts are true and fair.

6. Duties of a Company Auditor Duty to Conduct a Proper Audit : The auditor is required to carry out a thorough examination of the company’s financial records according to accounting standards and auditing guidelines. Duty to Report True and Fair View : The auditor must express their opinion on whether the financial statements provide a true and fair view of the company’s financial position. Duty to Act Independently : The auditor must be independent and impartial in conducting the audit, free from any influence or conflict of interest. Duty to Identify Fraud or Mismanagement : The auditor has the responsibility to identify and report any instances of fraud, mismanagement, or violations of laws and regulations.

7. Duties - Compliance with Legal and Regulatory Framework The auditor must ensure that the audit process adheres to relevant laws, regulations, and accounting standards (e.g., Companies Act, 2013, in India). They must comply with ethical standards as set by professional bodies like ICAI (Institute of Chartered Accountants of India) or other national/regional bodies.