Removal of Auditor

The auditor must review disclosures for adequacy, and if the auditor concludes that information disclosures are not reasonably adequate, the auditor must state so in the auditor’s

According to the pro and contra Section 203D and 203E of the Corporations Act as above, most judges and scholars agree that the procedure of removal directors as stipulated in the Corporations Act provides fairness treatment for the directors who may be removed. However, they still strongly argue whether the Section 203D is mandatory or not. Moreover, they questioned the existence of Section 203E since it eliminates flexibility for companies to make decision particularly in the emergency situation as explained above. Therefore, in order to provide broader perspectives about the relevancy of Section 203D and Section 203E, it is necessary to compare the procedure of removal directors in the Australian legislation with the

Exceptions can be approved by the Board and are made in cases where the revenue paid for such services contributes less than 5% of revenues paid to the auditing firm. Also, a public accounting firm may provide these non-audit services along with audit services if it is pre-approved by the audit committee of the public company. The audit committee will disclose to investors in periodic reports its decision to approve the performance of non-audit services and audit services by the same accounting firm. This requirement to disclose to investors is likely to inhibit auditing committees from approving the performance of auditing and non-auditing services by the same accounting firm. Other sections outline audit partner rotations, accounting firm reporting procedures, and executive officer independence. Specifically, subsection 206 states that the CEO, Controller, CFO, Chief Accounting Officer or similarly positioned employees cannot have been employed by the company's audit firm for one year prior to the audit.

If he rejects and acts as a whistle-blower, the Finance Director may sack him, while agreeing with his supervisor, he is an accomplice to a possible crime, while surely lost his credential as a professional accountant. The external auditor of ABC is in a similar situation. While it is true that public accountant serves the public interest, especially shareholders, management has the power to appoint a different auditor, who is willing to accept their accounting practice. Auditors, who are concerned about losing the clients, might turn a blind eye to such issues they are supposed to identify to shareholders.

If the accounts and projections are not updated, then the financial statements will mislead the auditors, bank officials and the users of the financial information in their judgment of the company’s financial health. This practice is dishonest and contradicts the integrity principle per the Code of Conduct. The objectivity principle states that the professionals should not be prejudiced and should be free of conflicts of interest in discharging their duties diligently. The question here is whether there is any basis on which Bill and Dan may not make disclosures to the external auditors or anyone else. What can be the best procedure to comply with the relevant laws and regulations so as not to discredit the profession and the company? These dilemmas can be solved by involving the Directors and the audit

4. The SEC wants to understand the reasons behind the auditor change and what they might say about a company’s health and operations. They want to see if the client initiated auditor change was because of things like disagreements over internal control weaknesses or reliability of financial reporting. The registrant must specifically comment on whether the company had any significant disagreements with its auditors over accounting principles, auditing procedures, or other financial reporting matters. The dismissed audit firm must communicate with the SEC, stating whether it agrees with

However, as said auditor is not “actively” responsible after auditor’s report has been issued unless the conditions are satisfied.

The removal of a director by the board in the FDC case creates legal and ethical issues, which ultimately led to the onset of commercial issues. Despite the legal, ethical and commercial issues, this case is strongly indicated that there are some problems in the mechanism of removal directors stipulated in the Corporations Act 2001 (Cth) (“Corporations Act”) S 203D and S 203E. This indication is underpinned by some cases in the Australian court in which directors are removed also by the board. Therefore, this paper will analyse the legal, ethical and commercial issues regarding with the removal of FDC’s director, discuss the problem in the procedure of removal directors stipulated in the legislation, and compare other regulations in the common law and civil law countries. Finally, drafts of new mechanism of dismissal directors will be provided in this research to reform Section 203D

An auditor’s role in an audit is very important. An auditor must be able to collect enough evidence to supports their finding, and also be on the lookout for fraud. Company’s may or may not know the law, but it is the job to know the law, and be able to educate and report findings properly. Since the Sarbanes-Oxley Act, there have been provisions that have directly affected auditors. This paper will include the details of the Sarbanes-Oxley Act, how ethics and independence have affected auditors, as well implementation of new standards based on the Sarbanes-Oxley Act.

The successor auditor is the auditor who is considering accepting or has already accepted engagement with the new firm. Communication between the predecessor and the successor is important. This information can bring about many issues such as “the predecessor auditor and the client may have disagreed about accounting principles, auditing procedures, or similarly significant matters” (PCAOBUS.org, 2013). The successor auditor should initiate the communication with the predecessor. The reason behind the successor auditor initiating the communication is to obtain valuable information that can lead to whether or not they should accept the engagement. The successor auditor may only request reasonable information to the predecessor auditor pertaining integrity of management, disagreements in accounting principles, auditing procedures, and or other significant matters. In addition, successor auditor can establish communication with audit committees or other with equivalent authority regarding “fraud, illegal acts by clients, and internal control related matters” (PCAOBUS.org, 2013). There are laws of confidentiality that the predecessor must abide by. The predecessor must maintain confidentiality at all times. Due to this confidentiality laws

There are numerous threats to the independence of auditors which have been identified in the multiple studies and discussions both in Australia (such as the Ramsay report, CLERP 9 Paper) and internationally by IFAC, the European Commission

This frequently puts the auditor in the position, in effect, of deciding whether a company is able to obtain the funds it needs to continue operating. Thus, the auditor’s qualification tends to be a self-fulfilling prophecy. The auditor’s expression of uncertainty about the company’s ability to continue may contribute to making it a certainty.

B. Why does a successor auditor need to contact the predecessor auditor? What could the predecessor auditor tell them? Summarize Au 315.07-.09.

This is done by the holding of a certain time of meetings. Next, in section 235 (1) provides that where a person other than the Official Receiver is appointed liquidator, the appointee shall give the Official Receiver all the information and access to and facilities for inspecting the books and documents of the company and all the aid that may be required so as to enable this officer to perform his duties under the Act. Where the winding up takes longer than time that must to complete, liquidators are bound to report on the conduct of the liquidation to the Registrar and this report must be written in the form of a statement, sent not late than thirty days after the expiration of the period of twelve months from the commencement of the liquidation and thereafter at least every six months until the winding up is concluded. Other than that, there may be occasions on which the liquidator will be obliged to give information on behalf of the company in the course of legal proceedings in which the company may be

The internal auditor have a several roles in the company which is the first one the audit committee need to discharge and restrict the governance responsibilities and the