a)- Special notice of the intended resolution must be given to the company.
- The company must send a copy thereof to the auditor.
- The auditor is entitled to make written representations as his defense.
- An extra-ordinary general meeting must be summoned. A special notice of the intended resolution must be sent to all members. If the auditor has made representations members must be notified and copies must be enclosed unless received too late.
-If copies are not enclosed due to lateness or default by the company the auditor is entitled to - An auditor can only be removed from office if a general meeting passes an ordinary resolution to that effect.-
(b) Since an auditor has the statutory right of access to all the company's books, accounts etc and is entitled to demand explanation from officers of the company the obstruction by the company officers is antithetical to his duty and is entitled to:
i) Demand that the officers forthwith desist from interfering with his duties failing which he instigates their investigation with a view to prosecution.
ii) Write a protest note to the company.
iii) Make a report on the information availed to him and set out the circumstances in which it was made highlighting the problems encountered.
(c) -This problem is based on the question whether an auditor owes legal duty of care to a third party. As a general rule, an auditor does not owe 3rd parties any legal duty of care when making his report. However, a 3rd party who suffers loss or damage by relying on an auditors report may recover from the auditor if it is established that:
marto answered the question on February 6, 2019 at 11:10
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