Table of Contents- f8 Knowledge Summary (March/June 2018) Topic Page number

 
Appointment of auditors 
Only a member of a recognised supervisory body is eligible to be appointed as an auditor. The person to be 
appointed as the auditor is required to hold a professional accountancy qualification. 
1.
Appointed by shareholders 
2.
Appointment runs from the end of the Annual General Meeting (AGM) until the end of the next AGM. 
3.
On appointment , need to get ‘clearance’ from outgoing auditor 
For entities in which a share is owned by the state, the auditor is appointed by the Secretary of State or 
Ministry of Finance (or a person authorised by the Ministry of Finance) 

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F8 KNOWLEDGE SUMMARY-SKANS SCHOOL OF ACCOUNTANCY
9 
Removal of auditors 
 
1.
 
RESIGNATION: Sometimes it is necessary for the auditors to resign. If an auditor resigns, they should do so 
in writing and they may wish to speak to the shareholders to explain their reasons 
2.
 
FORCED REMOVAL: Sometimes, the Board of Directors or some shareholders may wish to remove the 
auditors. A General Meeting must be called so that the shareholders can vote on the proposal (via an 
ordinary resolution). 
3.
 
AUDITORS DO NOT WISHTO SEEK REAPPOINTMENT: Sometimes the auditors finish the annual audit and 
decide they do not wish to audit the company in future years. As such,when the board asks them to accept 
nomination for the following year, the auditors should politely decline and issue a Statement of 
Circumstances. 
Key points 

Directors cannot remove the auditors themselves. 

Auditors Can be removed by a simple majority at a general meeting. 

The auditors should be given notice of such a meeting 

They are allowed to speak at the general meeting 

Deposit at the company’s registered office a statement of the circumstances connected with the 
removal/resignation or a statement that there are no such circumstances. They can request an 
Extraordinary General Meeting (EGM) of the company to explain the circumstances of the resignation.