F8-Task 2-3

Regulation by the profession ?Role of the ACCA

c) Legislation establishes:

Auditor’s rights and duties

The law gives auditors both rights and duties. This allow audits to have sufficient power to carry out an independent and effective audit.

UK as an example: Companies Act 2006

c) Legislation establishes:

Auditors’ rights

?Access to books and records of the company Information and explanations

?Receive notice of/attend general meetings

?Speak at general meetings

?Right to receive a copy of any written resolution proposed

c) Legislation establishes:

Auditors’ duties

?Compliance with legislation

?Truth and fairness of accounts ?Adequate accounting records and returns ?Agreement of accounts to records ?Consistency of other information ?Directors’ benefits

c) Legislation establishes:

?Eligibility to act as auditor

Most legal frameworks require auditors to be members of an appropriate professional body such as ACCA

d) Appointment, removal and resignation

d) Appointment, removal and resignation

Summary

1 The regulatory framework

Auditors’ rights and duties are governed by national legislation.

2 Appointment, removal and resignation of auditors

Appointment and removal require shareholders' resolutions. Auditors may resign at any time by giving notice in writing.

3 International Federation of Accountants

IFAC is an international organisation of accountancy bodies. Its mission is to establish and promote adherence to high-quality professional standards.

4 International Auditing and Assurance Standards Board

The IAASB, an operating board of IFAC produces international standards on

auditing, assurance and related services.

5 The scope and authority of IAASB pronouncements

IAASB pronouncements do not overrule local laws or regulations but where they form part of the regulatory framework (eg in the UK) they are mandatory.

6 Regulation by the profession

Professional bodies, such as ACCA, establish regulations relating to education and training and ethics.

You’re a Champion! Thanks for staying with us. You have finished this task.