Appointment and Removal of Auditor

1. At the AGM of SS Auto Industries Private Ltd., Mr. K is appointed as the auditor. Mr. K refuses to accept the audit. The company holds another general meeting and appoints a new auditor.
2. Mr. P, FCA, working as Manager of S and Co., a Chartered Accountant firm, signed the audit report of BSN Industries Ltd. on behalf of S & Co.
3. Mr. Y a practicing chartered Accountant met with an accident and hence authorised his employee Mr. B who is a qualified chartered Accountant to sign the audit report of the company as it was getting delayed. Explain and justify your views.
4. B is appointed auditor of PQR Ltd., at a total remuneration of Rs.50, 000, classified as under: (i) For Unit X of the Company Rs.20,000; (ii) For Unit Y of the Company Rs.20,000 and (iii) For Head Office Rs. 10,000. As per terms of appointment, B can collect his fees on progressive basis, on completion of audits of unit X and /or Y. B completed the audit of unit Y and recovered Rs.20,000 on account of the audit fees though the entire audit is not completed. Explain whether B is indebted to the Company for an amount exceeding Rs. 1,000 and therefore disqualified.
5. ‘C’ is a partner in ABC Associates, Chartered Accountants. Analyse whether disqualification provisions are attracted in the following cases: (a). ‘C’ is indebted for an amount exceeding Rs.1,000. Can ‘C’ be appointed as an auditor in his individual name?; (b). The firm is indebted for a sum exceeding Rs. 1,000. Can ‘C’ be appointed as an auditor in his individual name?
6. In case the existing auditors appointed at the Annual General Meeting refused to accept the appointment, whether the Board of Directors could fill up the vacancy?
7. Mr. X, C.A., who was appointed as the first auditors, of the company, was removed without the prior approval of the Central Government before the expiry of their term, by calling an Extra-ordinary General Meeting.
8. Some of your friends are forming a new company. They wish to include the following clause in the Articles of Association of the company. “The first auditors of the company will be M/s XY & Co, Chartered Accountants who will hold office for five years”. They seek your advice in the matter.
9. At the Annual General Meeting of a company in which a nationalised bank held 20% of the subscribed capital, X and Co., Chartered accountants were appointed as auditors by passing an ordinary resolution.
10. Ram & Hanuman Associates, Chartered Accountants, in practice have been appointed as Statutory Auditor of Krishna Ltd. for the accounting year 2006-2007. Mr. Hanuman holds 100 equity shares of Shiva Ltd., a subsidiary company of Krishna Ltd.
11. The auditor of Y Ltd. resigned after valid and accepted appointment whereupon the Board of Directors appointed another auditor treating it as a casual vacancy.