Auditing and assurance revision question and answer

Auditing and Assurance Revision Questions and Answers

A member of Board of Directors of M/s XYZ Company Limited elected for four years tenure the annual general meeting of the company resigned from his post after two years from the date he elected for that post. The Board of Directors wants to propose for appointment of a member for that vacant post for the rest of the period calling special general meeting of the company. You are required to examine whether the process of the Board of Directors is commensurate with the company Act, 2063.

As per section 87 of the company Act, 2063, the Annual General Meeting is authorized body to appoint member of board of directors of the company. However, if any of the elected member of the board of directors resigns or the post is vacant due to any other reason, section 87 (2) states that the board of

directors have to appoint member of board of director for such vacant post. The board of directors can’t refer the annual general meeting of the company to appoint a member in such vacant post. Therefore, the move of the board of director is not commensurate with the provision of company Act, 2063.

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