ABSTRACT
In order to ensure that a company’s accounts serve the purpose for which they were intended, that is, to give both the members of the company and the public accurate information about the financial position of the company, the accounts must be subject to professional scrutiny. Therefore, by s 384, every company must appoint an auditor or auditors (with the exception of dormant companies, private companies which are exempt from audit under s 249A and companies which have passed an elective resolution under s 379A dispensing with the laying of accounts). In a case where a company does not appoint an auditor and is required to do so, the Secretary of State may appoint someone to fill the vacancy. By s 385, the auditors are appointed at the general meeting at which the accounts are laid to hold office during that meeting, until the conclusion of the next general meeting at which accounts are laid. Once appointed, auditors have a right of access at all times to the company’s books and accounts and are entitled to require from the company’s officers such information and explanations as they think necessary for the performance of their duties as auditors.14 It is a criminal offence for an officer of the company to make a statement to the auditors which conveys or purports to convey any information or explanations which are misleading, false or deceptive.15 The auditors of a company which is a subsidiary undertaking16 (as well as the company itself) is under a duty to supply the auditors of the parent company such information and explanations as they may reasonably require for the purposes of their duties as auditors of the parent.17 The auditors are entitled to receive all notices of and other communications relating to any general meeting of the company which a member is entitled to receive and to attend any general meeting.18 Further, the auditors are entitled to speak at any general meeting which they attend. Auditors are entitled to such remuneration as determined by the company in general meeting and there must be a note in the company’s accounts which states the amount which is paid to auditors as remuneration.19
