Module 9 Auditor Responsibilities: Legislations Flashcards
What are the rights of an Auditor under the Companies Act 2006?
The right to receive information:
- The right of access
- Information and explanations from any directors or employees
- Additional information from subsidiaries incorporated in the UK
Rights in relation to resolutions and meetings:
- Copies of communications for any written resolution
- Notices of general meetings and attend such meetings
- Heard at any general meeting on any part of the busienss which concerns them
What are matters reported by exception? RAPID
- Returns have been recevied from branches not visted by the auditor
- Accounts agree with the underlying records
- Proper accounting records have been kept
- Information and explanations necessary for the purposes of audit have been received
- Directors’ emoluments (salary, bonuses and pensions) and other benefits disclosures are complete
External auditors are usually appointed by shareholders (>50% of vote), what are the situations that Directors can appoint auditors?
- Any time before the company’s first period for appointing auditors (first time a company requires an auditor)
- To fill a casual vacancy (if an auditor resigns during the term of office)
- If they previously had an audit exemption and have now lost it
How are auditors re-appointed?
- Public companies - an auditior is appointed/re-appointed at each AGM by the shareholders
- Private companies - Automatic re-appointment unless 5% or more of shareholders object. Company’s articales of association may also prohibit automatic re-appointment.
How are auditor’s fees fixed?
The audit fee is fixed by whoever makes the appointment
When can an auditor be removed during term of office?
Auditor can be removed at any time. Shareholders do this by passing an ordinary resolution.
What are auditors’ rights to protect against unwarranted dismissal?
- A copy of motion of removal must be sent to auditors
- Auditors has a right to make written statements regarding their removal and have these passed to the shareholders
- Auditor retains the right to attend the normal AGM of company in the year in which they are removed
When an auditor resign, what are they required to send?
- A letter of resignation
- Public interest company, a statement of circumstances also
- Non public interest company must provide a statement of circumstances unless specific exemptions
- Auditor may request that a General meeting is called for the purpose of considering the circumstances connected with the resignation
What must a statement of circumstances do?
It must either
Assert that there are no circumstances connected with the departure from office that in the auditors opinion, the shareholders and creditors of the company should be made aware of
OR
Disclose details of such circumstances
Where must the statement of circumstances be sent to?
- In most cases the SoC must be sent out to the company’s shareholders and debenture holders (non-public interest companies with no details to disclose can miss this step)
- FRC (public auditor body)
- Auditors RSB (private body)
- Companies House (unless a court order)
What is concealing or transferring the proceeds of criminal conduct?
A person commits an offence if they conceal, disguise, convert or transfer criminal property. It is also an offence to remove criminal property from the UK.
What is arrangements to facilitate the acquisition, retention, use or control of criminal property?
A person commits an offence if they enter into or become involved in an arrangement which they know, or suspect facilitates the acquisition, retention, use or control of criminal property by or on behalf of another person.
What is acquiring, using or possessing criminal property?
A person commits an offence if they acquire, use or possess criminal property. An exception to this offence relates to property acquired for adequate consideration (to protect someone who has inadvertently been sold criminal property)
What businesses are regulated sectors for Money Laundering regulations?
- Auditors, insolvency practitioners, external accountants and tax advisers
- Credit institutions
- financial institutions
- independent legal professionals
- trust or company service providers
- estate agents
- high value dealers
- casinos
- cryptoasset exchange providers
What are the three areas that ML regulations cover?
- Risk assessment and controls
- Customer due diligence
- Supervision and registration
