REMOVAL OF AUDITOR

REMOVAL OF AUDITOR

Section 362 of CAMA 1990 A companies may by ordinary resolution remove an auditor before the expiration of his terms of office not withstanding anything in any agreement between the company and the auditor.

Section 362 (2) When the resolution is passed for his removal the company shall within 14 days give notice of that fact in prescribed form to (CAC) and if a company fails to give notice required by this subsection, the company and every officer of it who is in default shall be guilty of an offense and liable to a daily default fine and MOO

Section 362 (3) nothing in this section shall be taking as depriving a person removed under it of compensation or damages payable to him in respect of the termination of his appointment as auditor or of any appointment terminating with that as auditor

a.     Incompetence sec 357 (2)

b.     Misconduct

c.      Termination of contract

d.     Insanity

e.     Winding up

f.       Bankruptcy

g.     Resignation, auditors can be resigned. Here .are two main reasons why they may wish to do so. These are:

        i.            The obvious reasons, ill health, the company have grown large for a small audit firm, the fee is inadequate.

Where the auditor concludes that because of fraud or other irregularity the accounts do not show a true and fair view and there is no immediate opportunity to report to members. He would be unable to report to members if the entity refused to issue its financial statement.