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

Pelham Ltd, a private company, has its auditor Corbin & Co removed by an ordinary resolution of members before the end of the auditor's term. Which of the following protects the auditor's position?

The auditor is entitled to notice of the meeting and may make written representations and speak at it. This protects independence. Removal does not need a court order, and there is no general statutory right to twelve months' fees.

  1. AThe auditor has the right to receive notice of the meeting and to make written representations or speak at itCorrect
  2. BThe auditor can only be removed by a court order
  3. CThe auditor must be given twelve months' fees as compensation by law

Explanation

An auditor facing removal is entitled to notice of the meeting and to make representations to members, which protects independence. Removal does not require a court order, and there is no general rule requiring twelve months' fees as compensation.

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