Appointment, resignation and removal

In this lesson

1. 0:00 Appointment, removal and resignation explained
2. 1:05 How auditors are appointed by shareholders
3. 2:10 Independence requirements and eligibility criteria
4. 3:02 Maintaining auditor independence over time
5. 4:11 Professional body membership and firm requirements
6. 5:15 Removal and resignation procedures

About this lesson

You'll discover who has the power to appoint auditors (shareholders, not directors), what qualifications they must hold (membership of a recognised supervisory body like ACCA or ICAEW), and the key restrictions that protect auditor independence (such as why company employees and business partners cannot audit). This is essential knowledge for the Audit and Assurance paper, where understanding the governance framework around auditor appointment directly links to exam questions on auditor eligibility, conflicts of interest, and regulatory compliance. The lesson covers three core scenarios: appointment (how auditors are selected and put in place for annual terms), removal (when shareholders vote to end the relationship, often due to performance concerns or statutory tenure limits), and resignation (when auditors themselves initiate the break, typically due to ethical conflicts or independence threats). You'll also learn the practical requirements—such as providing written notice and a statement of circumstances when resigning—and when regulatory authorities must be informed, particularly for listed or public interest entities. By mastering this topic, you'll be able to confidently answer exam questions about auditor eligibility, independence safeguards, and the formal processes that govern the auditor-client relationship. This foundation also prepares you for deeper exploration of ethical principles and threats to independence covered later in the AA syllabus.

Duration: 6m