Audit Issues
Auditors have rights to access company records and require information from officers. Failure to comply is an offence, but a defence is available if compliance was not reasonably possible.
Subsidiaries must cooperate with auditors, and penalties apply for non-compliance. Knowingly making false statements to auditors is also an offence.
Auditors must notify the ODCE if they believe the company has breached financial record-keeping obligations, with penalties for failure to notify. They must also report serious offences to the ODCE.
Auditor remuneration must be disclosed, and the auditor’s report must confirm the accounts’ accuracy. Auditors have duties of professional integrity and must exercise reasonable care and skill.Their liability for negligence has evolved, with courts ruling that primary duty is to the company, not individual shareholders.
Larger private companies must establish audit committees to review accounts and monitor auditors, with specific criteria for committee composition.
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