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ACCA Applied Skills · Corporate and Business Law (Global) · Other company officers

Brandt Ltd wishes to appoint Orla as its auditor. Orla is a qualified accountant but is also an employee of Brandt Ltd in its finance department. Can she be appointed?

Orla cannot be appointed because an officer or employee of the company is disqualified from being its auditor. Professional qualification does not override this, and director consent cannot remove the bar. The rule protects the auditor's independence from the company being audited.

  1. ANo, an officer or employee of the company is disqualified from acting as its auditorCorrect
  2. BYes, because she is a qualified accountant
  3. CYes, provided the directors give written consent
  4. DYes, if she resigns from the board but stays an employee

Explanation

An officer or employee of the company cannot act as its auditor, as this would compromise independence. Qualification alone is not enough, and director consent cannot cure the disqualification. Remaining an employee leaves the disqualification in place.

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