The auditors of Obuasi Ltd resigned on 21 August 2019 after they had been validly appointed and accepted. The directors of Obuasi Ltd appointed Ofori Ansong and Co. Chartered Accountants as their new auditors on 10 October 2019. The Registrar General refused to accept Ofori Ansong and Co as auditors on the grounds that the directors had acted beyond their powers since, the Registrar General has the power to appoint auditors.
Required:
Comment on the action of the Registrar General. (7 marks)
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Section 134 sub section 3 of the Companies Act 1963 (Act 179) requires that the first Auditors of a company incorporated after the commencement of the companies act be appointed within 3 months of incorporation of the company or prior to the delivery to the registrar of the particulars required under section 27 of the act; (2 marks)
- It also requires every existing company, without auditors to appoint auditors within three months after the commencement of the act; (2 marks)
- Sub section 4 (a) also empowers the directors to appoint the first auditors for the company and fill any casual vacancy in the office of the auditor. Sub section 4 (b) says that if a company shall have no auditors for a continuous period of three months, the registrar may appoint auditors; (2 marks)
- On the basis of the above the registrar is not right by rejecting Ofori Ansong and Co since 21st August 2019 to 10th October 2019 is less than three (3) months. (1 mark)