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Dear Ken,
As auditors are to be reappointed each year, that means that audit for each year is an individual job which will involve renegotiation of fees, auditing planning, new appointment letter, restating duties and responsibilities of each parties and so on, isn’t it?
Also, when an audit for a particular year is completed and if a new auditor is elected for subsequent year in the AGM, do the outgoing auditor have the right to participate in this AGM? And do they still have to present the ‘statement of circumstance’ despite having successfully completed their job?
If an auditor is elected to do an audit job in the AGM. Subsequently, the Board members/ Audit committee members will approach the auditor with a proposal. If the auditor accepts the appointments then well & good, but what happens if the auditor declines the appointment? Do the share holders have to have another meeting to decide on who will be the substitute auditor?
Substantially, your points in the first question are correct. Fees will be renegotiated, audits always have to be planned, there will be another engagement letter.
Outgoing auditors must always file a statement of circumstances and have the right to speak at the AGM where they were responsible for the audited FS.
Generally, your second point will not arise because the directors will have sounded out teh new auditors. However, if something were to happen, the directors can appoint auditors to fill the casual vacancy. Those auditors, as all auditors, will hold office until the next AGM.
Hi,
I thought auditors were to be reappointed every 5 years and not every year?
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