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POINTMENT OF EXTERNAL AUDITORS,leaves... Audit Committee,RESIGN REMOVE

soft skills
APPOINTMENT OF EXTERNAL AUDITORS {IPOINTMENT OF EXTERNAL AUDITORS,leaves... Audit Committee,RESIGN REMOVE }n most countries, the auditors are reporting to the shareholders, so are appointed by the shareholders. The Board of Directors will propose a Firm and this will then be voted on by the shareholders. Usually, they are appointed on an annual basis at the AGM. If auditors are needed mid-year (e.g. because the previous Firm resigned) then it is often possible for the Board of Directors to appoint a Firm up till the next AGM. In most large companies, there will be a specialist Board Committee that will recommend a Firm to the main Board – this committee is called the Audit Committee. When the external auditor leaves... Sometimes it is necessary for the auditors to RESIGN. If an auditor resigns, they may wish to speak to the shareholders to explain their reasons. Therefore, the law allows them to require the company to call a General Meeting (GM), or to require the company to send a written explanation to shareholders. Sometimes the Board of Directors, or some shareholders, may wish to REMOVE a Firm of auditors before the annual vote at the AGM. A General Meeting will need to be called so that the shareholders can vote on this proposal. Sometimes the auditors finish the annual audit and decide they do not wish to audit the company in future years – as such, when the Board asks them to accept nomination for the following year, the auditors politely decline as they DO NOT WISH TO SEEK REAPPOINTMENT. This may happen for several reasons: ● client is growing too large ● audit risk is seen to be getting too high ● audit firm wish to focus on other clients ● client has decided it is time to change.
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