Acc311 Assignment No. 1 solution
Friday, April 22, 2011 Edit This
"Fundamentals of Auditing (ACC311)"
Assignment No. 01 Marks: 15
"Appointment of auditor"
Solution
(1) Mr. Sajid's appointment will legal if his tenor for employment was 3 years before otherwise it be illegal according to 'a'.
(2) Fine Associates (Pvt) Limited, a consultancy firm can't be appointed as auditors because according to subsection 'e' of [Section 254(3)] corporate body can't be appointed as external auditors.
(3) According to subsection 'a' of [Section 254(3)] Miss Neelam can't be appointed as auditor of the company.
(4)Appointment of Wajid & company will not be legally permissible if Mr. Wajid's son is minor otherwise there is no legal objection on appointment.
(5) There is no legal objection on the appointment of M/s Wasif & Co. in the law.
(2) Fine Associates (Pvt) Limited, a consultancy firm, the majority of whose directors are chartered accountants, have been offered appointment as external auditor in Timber (Pvt) Limited whose share capital is less than 1.5 million.
(3) Miss Neelam who was practicing as a chartered accountant has been offered appointment in Fatima Enterprises as external auditor. Before this offer she was an employee of the company's directors two months ago.
(4) Mr. Wajid is a partner of Wajid & company. The firm has been consists of chartered accountants and were offered for appointment in Hilal Limited as an external auditor. Son of Mr. Wajid holds the shares of the Hilal Limited.
(5) Mr. Asif is the Chief Executive of Ghani Enterprises which is a listed company. He is not pleased with the performance of the current auditors. He is planning to propose the name of M/s Wasif & Co. as the new auditors in the coming AGM after approval of board. Mr. Wasif a partner of M/s Wasif & Co. is the Brother of Mr. Asif. Is the agreement legally permissible?
Requirement: (3 marks for each situation)
Analyze all situations one by one independently in the light of Companies Ordinance 1984 [Section 254(3)] and give your opinion, whether the appointments in all cases were legally permissible or not.
Assignment No. 01 Marks: 15
"Appointment of auditor"
Solution
(1) Mr. Sajid's appointment will legal if his tenor for employment was 3 years before otherwise it be illegal according to 'a'.
(2) Fine Associates (Pvt) Limited, a consultancy firm can't be appointed as auditors because according to subsection 'e' of [Section 254(3)] corporate body can't be appointed as external auditors.
(3) According to subsection 'a' of [Section 254(3)] Miss Neelam can't be appointed as auditor of the company.
(4)Appointment of Wajid & company will not be legally permissible if Mr. Wajid's son is minor otherwise there is no legal objection on appointment.
(5) There is no legal objection on the appointment of M/s Wasif & Co. in the law.
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ACC-311
Semester "Spring 2010"
"Fundamentals of Auditing (ACC311)"
Assignment No. 01 Marks: 15
"Appointment of auditor"
Following are some independent situations with reference to appointment & qualification of an auditor:
(1) Mr. Sajid, practicing as chartered accountant has been offered for appointment in Kisan limited as external auditor. He was an employee of the said company before starting his practice as chartered accountant.
Semester "Spring 2010"
"Fundamentals of Auditing (ACC311)"
Assignment No. 01 Marks: 15
"Appointment of auditor"
Following are some independent situations with reference to appointment & qualification of an auditor:
(1) Mr. Sajid, practicing as chartered accountant has been offered for appointment in Kisan limited as external auditor. He was an employee of the said company before starting his practice as chartered accountant.
(2) Fine Associates (Pvt) Limited, a consultancy firm, the majority of whose directors are chartered accountants, have been offered appointment as external auditor in Timber (Pvt) Limited whose share capital is less than 1.5 million.
(3) Miss Neelam who was practicing as a chartered accountant has been offered appointment in Fatima Enterprises as external auditor. Before this offer she was an employee of the company's directors two months ago.
(4) Mr. Wajid is a partner of Wajid & company. The firm has been consists of chartered accountants and were offered for appointment in Hilal Limited as an external auditor. Son of Mr. Wajid holds the shares of the Hilal Limited.
(5) Mr. Asif is the Chief Executive of Ghani Enterprises which is a listed company. He is not pleased with the performance of the current auditors. He is planning to propose the name of M/s Wasif & Co. as the new auditors in the coming AGM after approval of board. Mr. Wasif a partner of M/s Wasif & Co. is the Brother of Mr. Asif. Is the agreement legally permissible?
Requirement: (3 marks for each situation)
Analyze all situations one by one independently in the light of Companies Ordinance 1984 [Section 254(3)] and give your opinion, whether the appointments in all cases were legally permissible or not.
