19 - Auditors

Question 1

What constitutes a company as small?

Answer 1

Private companies with:
- Less than £10.2m turnover
- Less than £5.1m assets
- Less than 50 employees

Question 2

What constitutes a company is a micro entity?

Answer 2

Private companies with:
- Less than £632k turnover
- Less than £316k net assets on balance sheet
- Less than 10 employees

Question 3

What is the main duty of an auditor?

Answer 3

To report to members of a company on the truth and fairness of the accounts

Question 4

What is the punishment for misleading an auditor?

Answer 4

Up to 2 years in prison an/or a fine

Question 5

What is the minimum % ownership in a company that someone must have to demand an audit?

Answer 5

10%

Question 6

Who is not eligible to act as an auditor of a company?

Answer 6

Employees or partners of employees of the company

Question 7

Who is eligible to act as an auditor of a company?

Answer 7

Shareholders, creditors and close family connections (fathers, mothers but not partners)

Question 8

Is it possible for auditors to have an agreement that limits their liability entirely in the event of their own negligence?

Answer 8

No, agreement indemnifying auditors for their negligence are considered void

Question 9

What is the only way auditors can limit their liability?

Answer 9

With clear disclosure in the contract which is approved by members and renewed annually