Question1. The Companies Act 2001 is built upon a number of Fundamental principles which permeate its numerous sections and schedules. List and describe these principles.
Question2. The directors of Mido ltd, a newly formed company have written to Mr. Ben, FCCA with a view to securing his services as auditor. In their letter they have included the following comments:
“Your duties and rights as auditor will be determined by the board of our company. In the main, the duties are in line with the requirements of Companies Act 2001 but in the event of conflict or exclusion we will indemnify you against any legal action brought as a consequence of the position adopted. The Board also retains the right to dismiss you at any time devoid of necessarily disclosing the reasons for their action”.
Required:
i. Explain your understanding of Mr. Ben’s duties as auditor of Mido ltd.
ii. What is Mr. Ben’s relationship as the auditor to the directors of Mido ltd?
iii. Outline Mr. Ben’s rights under the Companies Act 2001 as auditor of Mido ltd.
iv. Would you agree with the directors which they have the authority to dismiss Mr. Ben?
v. What steps should Mr. Ben take prior to accepting the appointment as auditor with company?