Auditors

Auditors

1. Role

   • do accounts present a true and fair financial view of company?
     • s495
     • report
       • unqualified
         • good
       • qualified
         • fault/issue found
   • report on directors
     • s496
   • independent
     • must disclose any other services supplied to the company
       • s494
   • Senior official must personally sign the reports
     • s503
   • entitled to attend and speak at all gerenal meetings
     • s502

2. Watchdog/bloodhound

3. must be qualified

4. Appointment

   • members appoint
     • s485(4)
   • inital
     • directors appoint
       • s485(3)
   • usually annual
     • private company does not need to do this
       • s424
       • automatic reappointment
         • s487(2)

5. Access

   • all company info as he sees fit
     • s499
   • Director obliged to give information auditors ought to have
     • s500
   • anyone who will not disclose information may be prosecuted
     • s501

6. Removal

   • Ordinary resolution with Special notice
     • 28 days
     • s510
   • Right of protest
     • s513

7. Liability

   • Caparo Industries v Dickman
     • in order for auditors to be liable, must consider
       • forseeability
       • proximity
       • fairness
   • ADT v Binder Hamlyn
     • Takeover lost money due to bad auditing
       • liable
   • Barings v Cooper
     • ought to have known collapse was imminent
       • liable to holding company
   • Sasea Finance v KPMG
     • didnt notice insolvency
   • Royal bank v Bannerman
     • Liable to bank