ACCA AA Syllabus A. Audit Framework And Regulation - Appointment of the Auditor - Notes ^{3 / 8}

In order to be appointed as an auditor a person must be:

1. A member of a recognised Supervisory Body (RSB) such as ACCA

2. Allowed by that body to act as an auditor or

3. Be directly authorised by the state

Anyone who can't be an auditor?

Yes, cows can't be, which is unfortunate but also..

• Employees of the company

• The directors or secretary of the company

• Business partners or employees of the above

And how are they appointed?

1. The shareholders appoint the auditor

2. The appointment will be made at an AGM and run until the next AGM

3. If there is no AGM, the appointment will be automatic each year unless a shareholder objects

What are the Auditors Responsibilities when becoming appointed?

Well they have 2 main responsibilities..

1. Obtain clearance from the client to write to existing auditor (if denied the appointment should be declined)

2. Write to the existing auditor requesting any reasons why the appointment should not be made

And what rights does the auditor have when being appointed?

Well now there are 4 of these to remember my friend..

1. Unfettered access to company’s books and records

2. All explanations and information to be provided

3. Notice of all general meetings

4. Right to be heard at all such meetings on matters of concern to the auditor

When isn't the auditor appointed by shareholders?

• First Appointment

  This is made by directors as normally the company won't have had an GM by then

• Casual Vacancy

  Such as when the current auditor resigns

• Normal re-appointment

  This is normally by shareholders at an AGM - but often it is simply automatic when no AGM is required by shareholders