ACCA Applied Skills · Corporate and Business Law (Global) · Other company officers
Lindqvist Ltd's auditor, Aldous LLP, resigns during the year. Aldous believes there are circumstances connected with its resignation that should be brought to the members' and creditors' attention. What must Aldous do under the usual company law rules?
The resigning auditor must deposit a statement of the circumstances connected with the resignation with the resignation notice, or state that there are none. The company must then circulate the statement to members. Silent resignation is not permitted where such circumstances exist.
- ADeposit with its resignation notice a statement of the circumstances connected with the resignation, which the company must then circulate to membersCorrect
- BResign silently and disclose nothing so as to preserve client confidentiality
- CNotify only the company's bankers of the circumstances
- DWait for the next annual general meeting before giving any notice
Explanation
A resigning auditor must deposit a statement of circumstances connected with the resignation, or state there are none. The company must then send it to members, and the auditor may require a meeting. Staying silent would defeat the safeguard, and notifying only the bank does not satisfy the rule.
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