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Hello sir, in the syllabus there is the following part:
“Prior to the first annual general meeting the directors can appoint the first auditors or if an
auditor resigns, for example, because he or she falls ill, the directors can appoint another
auditor to fill a casual vacancy.”
This first appointment should be ratified by the members or not because is the first? Thank you very much.
In jurisdictions where this is the case (e.g. in the UK), the directors’ power to make the appointment is an expedient. Therefore it does not require the members’ approval. However, as the auditor’s appointment ends with the annual general meeting, when the auditor would offer themselves for reappointment – or the directors propose the appointment of a different auditor – the members would then appoint the auditor (by 50% majority).