ICAEW ARF · Chapter 2 · Question 1 of 8
Under the Companies Act 2006, who normally appoints the auditor of a UK company on an ongoing basis?
Test yourself: pick an answer
Reveal answer & explanation
Correct answer: C) The shareholders (members)
Explanation
Auditors are normally appointed by the members, for example by ordinary resolution at a general meeting of a public company. Directors may appoint the first auditors or fill a casual vacancy, but the ongoing appointment rests with the members. This supports the auditor's independence from the directors on whose statements they report.
More Obtaining and accepting an engagement MCQs
- Q3What is the main purpose of an audit engagement letter?
- Q4Which of the following would normally be included in an audit engagement letter?
- Q5Which of the following is a precondition for an audit?
- Q6Which of the following factors would most likely cause an audit firm to decline a new audit engagement?
- Q7Before accepting a new audit client, which of the following does the firm have to do under UK anti-money laundering requirements?