Every company is required to appoint an external auditor to audit the financial statements of the company in order to confirm that proper accounting records have been kept . The role of external auditors is essentially to protect businesses from fraud, point out discrepancies in the company’s accounting methods with a view to helping organizations enhance their operational efficiency.
By virtue of the provisions of the Companies and Allied Matters Act (the “Act”), every company is mandated to appoint an auditor or auditors to audit the financial statements of the company at each Annual General meeting (“AGM”). Such auditor is expected to hold office from the conclusion of the AGM until the conclusion of the next AGM. Only persons who are members of a body of accountants in Nigeria as established from time to time by an Act, qualify for appointment as external auditors.
The Act provides that a company’s external auditors shall be entitled to attend any general meeting of the company and to receive all notices of and other communications relating to any general meeting which a member of the company is entitled to receive and to be heard at any general meeting which they attend, on any part of the business of the meeting which concerns them as auditor. Every auditor for the time being of the company is entitled to receive notices of the AGM.
As the Act prescribes that “All businesses transacted at the AGM shall be deemed special business, except declaring a dividend, the presentation of the financial statements and the reports of the directors and auditors,...”, it follows that the external auditor who conducted the audit and prepared the audited financial statements should be invited to present the audit report at the AGM, notwithstanding the fact that it is the directors’ duty to lay the company’s financial statements before the shareholders in a general meeting. The auditor’s report is required to be read at the AGM and also made available for inspection by shareholders. While a number of small companies tend to dispense with the auditor’s presence at their AGMs, it is unusual for bigger private companies and public companies to hold an AGM without the presence of the auditor. The absence of an auditor at a large company’s AGM is likely to be an issue of concern to the shareholders. In conclusion, while the auditor is entitled to receive notice of all general meetings, neither the Act nor the National Code of Corporate Governance 2018 contain express provisions making it mandatory for the auditor to be present at the AGM. However, a reputable auditor/audit firm will be concerned to ensure that he/it is present at every general meeting at which financial statements are to be presented in order to confirm the integrity of the financial statements. Directors will also be displaying transparency in ensuring that the auditor is invited to present the company’s financial statements at every AGM.
 Section 357 (1) of the Act
 Section 358 of the Act
3 Section 219 (1d) of the Act
 Section 214 of the Act
 Section 345 of the Act
 This Code is expected to be applied by all companies(private and public) which are required to make returns to any regulatory authority in Nigeria.
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