STATUTORY AUDITS
LEARNING OBJECTIVE
1. THE AUDIT REQUIREMENT AND AUDITOR
2. RESIGNATION AND RETIREMENT OF AUDITOR
3. RIGHTS AND DUTIES
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1. THE AUDIT REQUIREMENT AND AUDITOR
Audit Requirement
In most countries, not all limited companies are required to have their financial statements audited. Many exemptions may apply to small and medium-sized companies.
Appointment of Auditors
Appointment of auditors is thru shareholders, directors or sometimes by supervisory board or audit committee.
A simple majority, two thirds, or a 75% majority may be required to appoint auditor.
Removal of Auditors
The shareholders or others exercise their right to end the term of office of the auditor because of dissatisfaction of his duties or cost of audit. Simple majority, or a 75% majority is needed.
2. RESIGNATION AND RETIREMENT OF AUDITOR
Resignation of auditor
Resignation takes place when the auditor gives up his office during the term of office.
In some countries the auditor is also allowed to require the company to call a meeting in order to discuss the reasons for the resignation.
Retirement of auditor
The auditor will simply not offer himself for re-election at the end of the period for which he was appointed as auditor.
3. RIGHTS AND DUTIES
Duties of auditor
To form opinion whether financial statements show a true and fair view. Auditor has no specific statutory duty to detect fraud. However, auditor has a duty to design procedures to give reasonable assurance of detecting material misstatement whether caused by fraud or error.
Rights of auditors
The right of access to the books, records, documents and accounts of the company.
Duties of directors
Safeguarding assets of company, keeping proper accounting records, preparing financial statements.
Source:
- Phnom Penh HR (www.pp-hr.com)
- Kaplan, FAU