Appointment of Auditor



Executive Summary3

Introduction4

Public Limited Companies4

Identification of appropriate Auditor5

Auditor5

Identification and Appointment5

Sources for Obtaining Information Regarding Auditors6

Appointment of Auditor

Executive Summary

The companies, whether public or private, large or small scale, hire auditors to assess and evaluate their position and functioning. It is the auditor's objective to appropriately identify and evaluate the dangers and consequences of the material misstatement. In this way, they provide to the organization a foundation for implementing and designing the responses to the risks of material misstatement. Through the application and understanding of the analytical skills of the client's business, the auditors are required to evaluate the company's activities. They also assess the significant events and transactions that have taken place within a fiscal year. The auditors are required to identify such areas that are most likely to present the particular risks that are linked with the capacity of audit, then, while hiring auditors The Company is required to identify the appropriate auditor for hiring and appointing. It is done through assessing whether the candidate has the knowledge of accounting an auditing standards and legislations. The public companies obtain this information through the various documents that exist online and in print publications. When the candidates come up to their expectations, only then they are hired. Thus, it is an entire process of knowing the auditor in every way before they are hired.

Introduction

The companies, whether public or private, are run through various finance and accounting departments for the validity and authenticity of their functions. They hire accountants and auditors for the purposes of decision making and controlling the activities of the business in all aspects. Most of the companies in present world hire auditors from outside the organization to track the performance and assess company's positioning and productivity in a transparent manner. This paper aims upon discussing the identification and hiring of the appropriate auditor in the public companies in United Kingdom. It elaborates upon the kind of information that they obtain and its nature and resources.

Public Limited Companies

The public company or the public limited company is company that possesses a limited liability and offers its shares, stock and other forms of securities to the public and has PLC after its names. The company has a minimum share capital amounting to £50,000 that is allowed to be offered to the public (FRC, 2012). These securities are usually sold through the market makers or stock exchange to the general public. There are many investors who own the public limited company's securities, while there are comparatively fewer shareholders who hold the shares of a privately held organization (The National Archives, n.d.).

The companies that are publicly traded are capable of raising capital and funds through selling their securities in the secondary or primary markets; these securities may either be equity or debt. Due to this fact, the there is an increasing significance of the publicly traded corporations. It was very difficult for the entrepreneurs to get capital in large amounts prior to the existence of the public ...