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

Zenith Ltd is a private company that has just been incorporated. Its directors want to know who normally appoints the first auditor of a company under the general company law rules tested in ACCA Corporate and Business Law (Global). Which statement is correct?

The directors normally appoint the first auditor of a new company, to hold office until the first meeting at which accounts are laid. After that the members appoint. The registrar, company secretary or a court do not ordinarily make the appointment.

  1. AThe first auditor is appointed by the directors, who act before the first general meeting at which accounts are laidCorrect
  2. BThe first auditor can only be appointed by the company registrar
  3. CThe first auditor must be appointed by the company secretary alone
  4. DThe first auditor is appointed by the court on application of any creditor

Explanation

Under the general model, the first auditors are appointed by the directors, and the members then appoint auditors at the general meeting where accounts are laid. The registrar, company secretary or a court do not have this routine role. The court or a regulator would only be involved in exceptional default situations.

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