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Recent demands by regulatory authorities and shareholders have obviously affected the traditional role of an auditor in various ways for example:
- Professional Competence and due care: an accountant must not only attain professional competence but must maintain the same. General and specific education is necessary. He must be continually aware of developments in the profession. He must exhibit care, competence and diligence.
- Professional behavior: must act in a manner consistent with the good reputation of the profession and refrain from any conduct which might bring discredit to the profession.
- Confidentiality: must respect confidentiality of information about a client acquired in the course of rendering professional services and should not use or disclose the same without proper and specific authority.
- Integrity: entails fair dealing and truthfulness i.e. must be straight forward and honest in performing professional services.
- Technical standards: an accountant should carry out professional services in accordance with the relevant technical and professional standards. Must carry out the clients instructions with utmost care and skill.
- Objectivity: an accountant must be fair, intellectually honest and free from conflict of interest. Objectivity must be demonstrated in all circumstances.
- Whistle blowing: since the accountant has a responsibility to the public he is bound to blow the whistle whenever necessary to enable relevant bodies take the necessary action to protect the public.
- Indoor/other information about the company e.g. products, markets processes.
-Investigation: though traditionally the auditor is not an investigator unless appointed as such shareholder are demanding more and more information from them and this compels the auditor to 'dig deeper' for the information. It is apparent that the traditional statements of auditors no longer appease members who have become more inquisitive.
marto answered the question on February 7, 2019 at 07:12
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The law requires that certain statutory books must be kept in the registered offices of the company.
Explain the contents and matters...(Solved)
The law requires that certain statutory books must be kept in the registered offices of the company.
Explain the contents and matters relating to inspection of the following statutory books:
(a) Register of members.
(b) Register of directors and secretaries.
(c) Register of directors' interests.
(d) Register of charges.
Date posted: February 7, 2019. Answers (1)
- Ropoff Company Ltd., a private limited company, has been under inquiry on alleged fraudulent financial transactions. The officers of the company under suspicion have denied...(Solved)
Ropoff Company Ltd., a private limited company, has been under inquiry on alleged fraudulent financial transactions. The officers of the company under suspicion have denied any association with the company.
At the inquiry it was suggested that the corporate veil be lifted and the realities of the company in question be looked into.
Explain the instances when the veil of incorporation may be lifted
Date posted: February 7, 2019. Answers (1)
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The principle of corporate legal personality is an important and fundamental aspect of company law.
Discuss this statement citing relevant decided cases.(Solved)
-The principle of corporate legal personality is an important and fundamental aspect of company law.
Discuss this statement citing relevant decided cases.
Date posted: February 7, 2019. Answers (1)
- Explain the effect of the failure by the company to register a charge of a debenture.(Solved)
Explain the effect of the failure by the company to register a charge of a debenture.
Date posted: February 7, 2019. Answers (1)
- Give reasons why a company may seek to control the funds from which dividends are paid.(Solved)
Give reasons why a company may seek to control the funds from which dividends are paid.
Date posted: February 7, 2019. Answers (1)
- Explain the circumstances when a dividend may become payable and enforceable as a debt against the company.(Solved)
Explain the circumstances when a dividend may become payable and enforceable as a debt against the company.
Date posted: February 7, 2019. Answers (1)
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(a) Explain the category of persons to whom an auditor owes a duty of care in the preparation of his audit report.
...(Solved)
(a) Explain the category of persons to whom an auditor owes a duty of care in the preparation of his audit report.
(b) Enumerate the rights accorded to an auditor to enable him perform his duties as the auditor of a company.
(c) In Hedley Byrne V. Heller (1964) the court held that provided that it could be established that a special relationship existed between parties it was possible for a person to sue for having suffered a financial loss even though no contractual relationship existed between the parties.
Highlight the factors that should be established in order for a third party to successfully sue an auditor for professional negligence.
Date posted: February 7, 2019. Answers (1)
- (a) Outline the qualified minority rights of a member which can only be enforced by the joint efforts of a membership group as defined under...(Solved)
(a) Outline the qualified minority rights of a member which can only be enforced by the joint efforts of a membership group as defined under the Companies Act.
(b) The Articles of X Company Ltd provide that every member is entitled to one vote for each of the first ten shares and thereafter to one vote for each additional ten shares. Jane owns one hundred shares. She transfers ten of her shares to her nine nominees to increase her voting powering general meetings. Joseph, who is the chairman at the general meeting, refuses to accept the votes of Jane‟s nominees.
Advise Jane on the validity of the Chairman‟s action and her right as a member.
Date posted: February 7, 2019. Answers (1)
- 'The rule in the case of Ashbury Railway Carriage Vs. Riche (1875)stated that an act has not been authorized by the objects clause of a...(Solved)
'The rule in the case of Ashbury Railway Carriage Vs. Riche (1875)stated that an act has not been authorized by the objects clause of a company's Memorandum of Association in ultra vires to the company and the members cannot ratify it.'
Discuss.
b) Explain the various ways in which persons intending to form a company may avoid
personal liability on contracts they make on behalf of the proposed company.
c) It has been held that the memorandum and Articles of Association of a company shall, when registered, bind the company and the members to the same extent as if the documents has been signed and sealed by each member and contained covenants an the part of each member to observe all the provisions of the memorandum and the articles.
Explain the effect of this provision on the relationship between shareholders and their company and between shareholders themselves.
Date posted: February 7, 2019. Answers (1)
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(a) The principle of corporate legal personality is an important and fundamental aspect of company law.
Discuss this statement citing relevant decided cases....(Solved)
(a) The principle of corporate legal personality is an important and fundamental aspect of company law.
Discuss this statement citing relevant decided cases.
(b) Ropoff Company Ltd., a private limited company, has been under inquiry on alleged fraudulent financial transactions. The officers of the company under suspicion have denied any association with the company.
At the inquiry it was suggested that the corporate veil be lifted and the realities of the company in question be looked into.
Explain the instances when the veil of incorporation may be l
Date posted: February 7, 2019. Answers (1)
- (a) Explain the rules that govern quorum and the exceptions thereof
(b) In relation to proxies, write brief notes on:
(i) General proxies.
(ii) Special proxies....(Solved)
(a) Explain the rules that govern quorum and the exceptions thereof
(b) In relation to proxies, write brief notes on:
(i) General proxies.
(ii) Special proxies.
Date posted: February 7, 2019. Answers (1)
- Discuss the powers of the liquidator:
(a) With the sanction of the court.
(b) Without the sanction of the court(Solved)
Discuss the powers of the liquidator:
(a) With the sanction of the court.
(b) Without the sanction of the court
Date posted: February 7, 2019. Answers (1)
- Two years ago, Smart Limited issued a series of debentures in favor of Tumaini Bank. The debentures were in the Standard Bank form described as...(Solved)
Two years ago, Smart Limited issued a series of debentures in favor of Tumaini Bank. The debentures were in the Standard Bank form described as a fixed and floating charge over all the company‟s assets. There was an express term of the debenture that the company would not issue a subsequent fixed charge to rank in priority to the floating charge. Six months later, Smart Limited issued a fixed charge over its freehold property in favor of Mali Bank Mali Bank was unaware of the prohibition. Smart Limited has gone into liquidation and both banks are proving their debts on priority basis.
Discuss the legal position of each bank.
(c) The most common method of securing debentures is to execute a trust deed.
Explain the meaning of a trust deed and outline its advantages
Date posted: February 7, 2019. Answers (1)
- Enumerate the various types of charges that require registration as stated under the
Companies Act.(Solved)
Enumerate the various types of charges that require registration as stated under the
Companies Act.
Date posted: February 7, 2019. Answers (1)
- (a) The law governing the directors' duty of care and skill takes account of the fact that the director may be a part-time counselor rather...(Solved)
(a) The law governing the directors' duty of care and skill takes account of the fact that the director may be a part-time counselor rather than a full-time professional manager.
Discuss.
(b) Mwerevu is one of the directors of Kamaliza Ltd. whose articles of association are in the form of Table A. He knows that his fellow directors are interested in obtaining motor vehicles from Modern Vehicles Ltd. to increase the company‟s fleet of trucks. Mwerevu purchases controlling shares in Modern Vehicles Ltd.
Modern Vehicles Ltd. then sells the trucks to Kamaliza Ltd. at Sh. 100,000 over and above the true market price. Mwerevu voted at the board meeting of Kamaliza Ltd. which decided on the purchase price, without revealing that he controlled the vendor company. When true facts are discovered, the company's board of directors does not protest against Mwerevu's conduct.
Mpole, a minority shareholder is aggrieved.
Advise him.
Date posted: February 7, 2019. Answers (1)
- (a) Joe owns 2000 shares in Lotto Limited and 1000 shares in Jolles Ltd. He sells all his shares in Lotto Limited to Janet and...(Solved)
(a) Joe owns 2000 shares in Lotto Limited and 1000 shares in Jolles Ltd. He sells all his shares in Lotto Limited to Janet and 500 shares in Jolles Ltd. to Jeremy. All the shares in Lotto Limited are partly paid up. Six months later, Lotto limited goes into liquidation.
(i) In the absence of any express agreement, discuss the liability of Joe and Janet in relation to the company's debts.
(ii) State the steps to be taken to register the transfer of shareholding from Joe and Jeremy.
(b) Outline the exceptional cases when a member may be held liable in excess of the limited liability which he undertook when he became a member of the company
Date posted: February 7, 2019. Answers (1)
- (i)State the circumstances under which the objects clause of a company may
be altered
(ii) Explain the procedure to be followed in altering...(Solved)
(i)State the circumstances under which the objects clause of a company may
be altered
(ii) Explain the procedure to be followed in altering the objects clause.
Date posted: February 7, 2019. Answers (1)
- In what way does the decision in the case of Macaura Versus Northern Assurance
Company Limited (1925) illustrate the corporate entity theory?
(Solved)
In what way does the decision in the case of Macaura Versus Northern Assurance
Company Limited (1925) illustrate the corporate entity theory?
Date posted: February 7, 2019. Answers (1)
- Mr. and Mrs. Matanguta intend to form a limited company known as M and M Hardware Limited. They approach you and seek you advice.
...(Solved)
Mr. and Mrs. Matanguta intend to form a limited company known as M and M Hardware Limited. They approach you and seek you advice.
Advise them on the following issues:
(i) What is the meaning of a private limited company according to the Companies Act?
(iii) Assuming Mr. and Mrs. Matanguta wish to convert the private company into a public company,
what would they be required to do?
Date posted: February 7, 2019. Answers (1)
- In relation to special notice, state the following:
(i) Objects of a special notice.
(ii) The number of days required.
(iii) The ordinary resolutions...(Solved)
In relation to special notice, state the following:
(i) Objects of a special notice.
(ii) The number of days required.
(iii) The ordinary resolutions which require special notice
Date posted: February 7, 2019. Answers (1)