BY

Atta-ur-Rahman Arif

APPOINTMENTFIRST AUDITOR:

The first auditor is appointed by the Directors of aCompany within 60 days of the date of incorporation.First Auditor will held office until the conclusion offirst AGM. Provided that:

a) The company in general meeting may remove anysuch auditor or auditors and appoint in his ortheir place any other person or persons who havenominated by any member of the company; and

b) If the directors fail to exercise their powers, thecompany in general meeting may appoint theauditors. [sec. 252(3)]

APPOINTMENTThe surviving or continuing auditor or

auditors may act while the directors fillthe casual vacancy. [sec. 252(4)]

Where the first auditors are notappointed within 120 days of the date ofincorporation, or where at AGM noauditors are appointed, or where thefirst auditor are unwilling to act, theSECP appoint the first auditor orauditors to fill the vacancy. [sec. 252(6)]

Subsequent Auditor:

Every company in each general meeting appoint anauditor or auditors to hold office from the conclusionof that meeting until the conclusion of the next AGM.

A retiring partner shall be appointed at the next AGMunless:

Not qualified for re-appointment, or

A resolution has been passed for appointing anotherauditor in his place or providing expressly that he shallnot be re-appointed, or

He has given to the company written notice of hisunwillingness to be re-appointed.

APPOINTMENT

The remuneration of the auditors of company

shall be fixed:

a) By the directors, in the case of the auditorappointed by the directors or,

b) By the SECP, in the case of the auditorappointed by the SECP or,

c) By the company in general meeting in allother cases, in the manner as the generalmeeting may determine.

[sec. 252(8)]

REMUNERATION

REMOVALThe company in the AGM may

remove the first auditor(s) andappoint another auditor(s) whohave been nominated by themember and of whose nominationnotice has been given to themembers of the company not lessthan 14 days before the date of themeeting. [sec. 253(3)]

QUALIFICATION OF AUDITOR A person shall not be qualified for appointment as an

auditor of

a public company or,

a private company which is a subsidiary of a publiccompany,

unless he is a Chartered Accountant. [sec. 254(1)]

All private limited companies whose paid up capital isin excess of Rs.3 million, in addition to the CharteredAccountant, a Cost and Management Accountant shallalso be a person qualified for appointment as anauditor. [sec. 254(1)]

DISQUALIFICATION OF AUDITOR1. A person who is, or any time during the

preceding three years was, a director,other officer or employee of the company;

2. A person who is a partner of, or in theemployment of the company;

3. The spouse of a director of the company;

4. A person who is indebted to the company;and

5. A corporate body. [sec. 254(3)]

POWER OR RIGHTS1. Access to Books

Have a right of access at all times to the books,papers, accounts and vouchers of the company,where kept at the registered office or elsewhere.

[sec. 255(1)]

2. To call for Information and Explanation

Every auditor shall be entitled to require anyinformation or explanation as he thinksnecessary for performance of audit.

[sec. 255(1)]

3. To receive notice of and attend meeting

Auditor shall be entitled to attend any generalmeeting of the company and to receive all thenotices of and any communication relating to,which any member of company entitled to.

[sec. 255(6)]

4. Signature on the audit report

Only the auditor of a company or where a firm isappointed, only a partner of the firm practicingin Pakistan, shall sign the auditor report.

[sec. 257(1)]

POWER OR RIGHTS

DUTIES1. To Make Report

An auditor is appointed in order to make areport to the members of the company onaccount of the company. [sec. 255(3)]

2. Report on Additional Matters

The federal government may be general orspecial order, direct the auditor to report onsome additional matters as may be specifiedin the order. [sec. 255(5)]

3. Attend The AGM

The auditor shall be entitled to attend anygeneral meeting of a company at which the

audited financial statements are presented.

[sec.255(6)]

4. To Assist the Inspector

It shall be the duty of an auditor to give to theinspector all assistance in connection with theinvestigation which he is responsible to give.

[sec.268]

DUTIES