Do shareholders appoint auditors?

The usual procedure is for a director who is a stockholder to move that a named accountant or accounting firm be the auditor for the company. The stockholders either approve or reject such motion or they can nominate another candidate by moving to amend the resolution.

Who appoints the auditors of a company?

How is a company auditor appointed? The directors appoint the first auditor of the company. He or she then holds office until the end of the first meeting of the shareholders at which the accounts are laid before the members.

Do shareholders choose auditors?

While auditor ratification has the potential to improve corporate govemance, many companies do not allow shareholders to vote on the company's selection of auditor.

Do shareholders have to approve auditors?

While the vote is not legally required, a vast majority (between 80 and 95 percent) of public companies submit their choice of auditor for shareholder ratification. Many companies state in the proxy materials that they give shareholders a voice on auditor selection to promote “good corporate governance.”

Who appoints external auditors of a company?

External auditors are independent auditors appointed by the company's shareholders; they usually belong to Certified Public Accountant Firm (CPA) to help remove any bias in the company's financial review.

Shareholders, Directors, and Auditors

Are auditors appointed by shareholders or directors?

Sections 489 to 491 restate the law on appointment of auditors of public companies, providing that auditors are generally to be appointed by shareholders by ordinary resolution in the general meeting before which the company's accounts are laid.

Who has primary responsibility of appointment of auditor of a limited company?

The appointment is done by the Comptroller and Auditor General of India. He should be appointed within 180 days from the 1st of April. The appointment is done by the members and he will hold office till the conclusion of the 6th meeting.

Who is auditor of shareholder?

Currently, the appointment of auditors is made by the management of the companies after taking shareholder approval at the annual general meeting (AGM).

Why is audit important to shareholders?

An audit is important as it provides credibility to a set of financial statements and gives the shareholders confidence that the accounts are true and fair. It can also help to improve a company's internal controls and systems.

Why do some companies seek shareholder ratification on auditor selection?

In general, these studies suggest that shareholder ratification serves as a monitoring device. Lower quality auditors2 and corporate governance increase the likelihood of voting against management's choice of auditor, and investor dissatisfaction is associated with subsequent dismissal of the auditor.

Who does the internal audit function report to?

The internal auditor is the entity's staff that work independently and objectively. This role normally reports directly to the audit committee and board of directors of an entity. However, there are certain things that internal audit should report to senior management of the entity like CEO and CFO.

How many shares need to vote affirmatively to approve the appointment of the Corporation's auditors?

Unless otherwise specified in the company's constitution, at least 2 shareholders must be present for the full meeting.

Can auditor can be held liable under companies Act 1949 for?

Introduction: An auditor, to perform his duties must have certain powers, without which it may not be possible for him to perform his duties honestly and thereby, he might be held liable for any loss which the company might suffer.

Do directors elect auditors?

In private companies, the directors appoint the first auditor of the company. The members may then appoint or re-appoint an auditor at a meeting of the company's members, or by written resolution, within 28 days of the directors sending the accounts to the members.

Who may appoint the first auditor of a company?

(4) For the purposes of subsection (3),(a) the directors may appoint the first auditors of a company and may fill a casual vacancy in the office of auditor; or(b) if a company does not have an auditor for a continuous period of three months the Registrar may appoint an auditor for that company.

Are shareholders accountable to auditors?

Whilst US corporations have shareholders and boards of directors, shareholders in the US have little to do with the audit process and auditors have no direct accountability to them. Auditors are, however, increasingly seen as accountable to the independent directors sitting on the audit committee.

Why would a shareholder be interested in the auditors report?

What is the importance of an auditors report for shareholders? Auditor's report express auditor opinion on truth and fairness of financial statements. It gives assurance to shareholders that financial statements which were prepared by management show true and fair or not.

Who are stakeholders in an audit?

Typical audit stakeholders include: CFO or comptroller. CEO. Accounts payable clerk.

Who Cannot be appointed as auditor of a company?

IF a chartered accountant is indebted to a company, the firm( in which he is a partner) cannot be appointed as auditor. Similarly, if the firm is indebted to the company, the partner of the firm cannot be appointed as an auditor of the company.

How and when should an auditor be appointed?

Section 357 of the Companies and Allied Matters Act (CAMA) requires every company to appoint an Auditor or Auditors at every Annual General Meeting (AGM) by way of approval of 75% or three-quarters of the members present and voting at the AGM. Such Auditor(s) appointed at the AGM shall hold office until the next AGM.

Does a private company need to appoint an auditor?

It is not mandatory for a private or personal liability company to appoint an auditor, unless the company is required to produce audited financial statements.

Who of the following are qualified for the appointment as auditor of a company?

(1) A person shall be eligible for appointment as an auditor of a company only if he is a chartered accountant in practice. (2) Where a firm is appointed as an auditor of a company, only the partners who are Chartered Accountants in practice shall be authorised by the firm to act and sign on behalf of the firm.

Can a holding company auditor be appointed as an auditor of its subsidiary company?

Hence an auditor can be appointed as an auditor of a subsidiary company provided he complies with the above mentioned provisions. And accounts of branch office of a company may be audited by the companies auditor 143(8).

Who can become an auditor?

Under what circumstances is one ineligible for appointment as an auditor of a company?

Section 161 (3): A person cannot be qualified for appointment if he has virtue of subsection (2) above, been disqualified as an auditor of a body corporate which is that company's subsidiary or holding company or subsidiary of that company's holding company.