Shareholders’ Must Legally Pick An Auditor Or Resolve Not To Have One.
Resolutions for Appointment of Auditors
A corporate auditor is a type of accountant that specializes in going over a company’s financial records to look for accuracy in the financial books. This is very important for all corporations large and small. An auditor appointment resolution is legally required in the Business Corporations Act in Alberta.The auditor appointment resolution lawyers at Kahane Law Office in Calgary, Alberta understand both audits and corporate resolutions. We are happy to help draft just the auditor appointment resolution or all the required annual resolutions. Call today for more help 403-225-8810.
Why A Company Should Have An Auditor
There are several reasons for needing an auditor. She or he can alert the company when something is amiss and when there might be wrongdoing in the company. Working with an auditor can help to make a company more efficient overall, and it can help them to save money. The auditor is often able to locate different areas of waste and potential waste within the company. This then allows the corporation to look closer into these areas and to get a better understanding of exactly what they may be able to change.
Of course, in addition to helping with efficiency, having an auditor ensures more accuracy when dealing with taxes. This keeps your company on the right side of the Canadian Revenue Agency by ensuring you are paying the proper amount at the end of the year. This eliminates or at least reduce the risk of receiving an audit from the CRA.
Why Company’s Require An Auditor Appointment Resolution
The simple answer to why an auditor appointment resolution is required is because the law states that it is needed. There is a good policy reason behind this though. By forcing the shareholders of the company to address this issue, it allows for better disclosure to the shareholders. This adds protection the them, the company and the corporate system in Alberta. Lastly, without an auditor appointment resolution requirement, a company would have no legal requirement to ensure that the financial statements are accurate.
Appointing the Auditor
During a shareholders’ meeting, the shareholders will be able to appoint an auditor by ordinary resolution. The auditor appointment resolution states which accountant or accounting firm will perform the audit on the company’s financial statements.The auditor will go over the company’s financial statements as mentioned. When choosing a corporate auditor for the company, it is important to make sure that they have plenty of experience with companies of your size.
If you have a large company, choosing an auditor who has only dealt with smaller corporations may be a bad idea. You want to work with an auditor or a team that has worked on companies of your size. Also, make sure you understand just what the auditor brings to the table and what type of information they will be able to offer. Additionally, an experienced auditor will be able to give you a good idea of just how long an audit of your company might take. The auditor appointment resolution is then kept in the company’s minute books.
What If Small Companies Do Not Want An Audit
Audits can be expensive. Some Small companies do not want to spend the money on an audit. Other companies only have one shareholder and do not need the protection from the Act. In this case you still require an auditor appointment resolution. It would not appoint an auditor. The auditor appointment resolution would state that the requirement for an audit is waived by the shareholders. Having an auditor is beneficial to a corporation. They help to ensure the honesty and reliability of the financial statements that come from the company. Naturally, this is a better option for anyone who has a stake in the company.
It is a good idea to explain the benefits of working with a corporate auditor to the shareholders. Always do this before the vote for the auditor appointment resolution. Keep in mind that the auditor is carrying out an independent assessment of the company’s finances. They provide an honest report with their findings. Their findings may point out a number of issues that you need to address.
If There Is A Choice, How Often Should Audits Occur In Alberta?
How often should you have an auditor examine the company’s finances? Many corporations will have an annual audit. However, others may find that a quarterly audit (not required) is a better option, especially if they are doing a large volume of business. In those cases, this should be reflected in the resolutions to appoint an auditor for the task. Other companies will require the audit in the auditor appointment resolution every other year. It is the shareholders’ choice.
Locating Auditor Appointment Resolution Lawyer in Calgary, Alberta
Make sure your corporation is including its legally required resolutions in your corporate minute book. These include an auditor appointment resolution. the law in terms of its corporate resolutions. The corporate resolution lawyers at Kahane Law Office in Calgary can help with your corporate resolution legal needs. Please connect with us today toll-free at 1-877-225-8817 (or 403-225-8810 locally in Calgary, Alberta), or email us directly here.