This document outlines corporate governance policies related to auditors for companies and banks in Pakistan. It discusses the appointment, qualifications, tenure, and responsibilities of auditors. The key points covered are: 1) Auditors must be appointed annually by companies and the first auditor is appointed by directors within 60 days of incorporation. Auditors hold office until the next annual meeting. 2) Auditors must meet qualification criteria and are disqualified if they have certain conflicts of interest with the company. 3) Bank audits must be conducted according to the Banking Companies Ordinance of 1962 and auditors must meet additional criteria set by the State Bank of Pakistan. 4) Auditors are responsible for opining

1. Corporate Governance
• Auditor
• M Abbas
• M Ghani
• MBA

2. Outlines
• Appointment and remuneration
• Appointment and removal of auditor
• BCO 1962
• SBP auditor criteria under 1961
• Auditors report
• Guidelines for external auditors 1962
• Qualification and disqualification of Auditor
• Tenure of Auditor
• Reading and inspection of report
• Signature on the Audit report

3. Appointment and remuneration
• At each annual meeting co. shall appoint
auditor or auditors to hold office from
conclusion of that meeting to the conclusion
of next meeting.
• First auditor shall be appoint by the directors
within sixty days of the date of incorporation.
• And shall hold office until the first annual
meeting.
• Provided that:

4. Conti…
1. Company can remove or replace auditor with
nominated and notice shall not be given to all
members before 14 days before of the annual
meeting.
2. If director fail to exercise, the company shall
appoint the auditor or auditors.
• The directors shall fill any vacancy in the office of
audit department.
• Any auditor appointed for vacancy shall hold
office until the next annual meeting.

5. Conti…
• If company not appointed any auditor within
120 days or filled vacancy in 30 days or
auditor not acts willingly , the authority may
appoint a person to fill the vacancy.
• The remuneration of the auditor shall be
fixed.

6. Appointment and removal of auditor
• Notice shall required at company annual
general meeting, appointing or retiring of
auditor.
• Notice shall not be given not less than 14 days
before of meeting.
• Copy of notice shall forward to members and
auditor not less than 7 days before the date
fixed for annual meeting.

7. Conti…
• If listed company, notice shall publish in one
English language and in one Urdu language
newspaper.
• Within 14 days from appointment every
company shall send information to registrar
of mutual consent.
• If there is any removal or retirement of
auditor, company shall send information to
registrar 14 days before.

8. BCO 1962
• BCO stands for The Banking companies
ordinance.
• Balance sheet, profit and loss accounts shall
be audited under section 34.
• Auditor shall audit above chartered
accountants ordinance 1961.

9. SBP auditor criteria under 1961
• Audit experience in last five years.
• Quality control review by ICAP.
• Affiliation with international firm of
accountants.
• It audit experience.

10. Auditors report
• Information and explanation true and fair?
• Transactions is in the power of Banking
company?
• returns from branches adequate for audit?
• Profit and loss accounts show true picture for
given time period?
• Other matters should brought to shareholder
notice if needed.

11. Guidelines for external auditors 1962
Observations
• Deposits maintained with and received from
other banks.
• Inter branch deposits and provisions for
taxation.
• Staff provident funds and gratuity funds
included.
• Nature and amount of all balances outside of
Pakistan.

12. Conti…
• Investment in shares of companies.
• All shares, purchases and swaps.
• Loan and advances granted to the directors or
officers.
• Loan and advances to companies or firms.
• Provision against classified assets.
• Expense incurred on branches, advertisements
and publicity.(profit, loss or capitalize).

13. Conti…
• Contributions and donations for charitable,
social and public welfare.
• Efficiency level of the internal audit.
• Auditors shall submit a special report to
director, banking supervision department, SBP
and endorsing a copy to concern bank within
15 days.

14. Qualification and disqualification of
Auditor
• A person shall not be qualified for
appointment as an Auditor.
• Who has partner, director, officer and
employee in last 3 years of the company.
• The spouse (shareek e hayat) of the Director.
• Indebted to the company.
• A corporate body.

15. Conti…
• After disqualification, he shall be vacated his
office from the date on which he becomes so
disqualified.
• If a person disqualified and acts as an auditor
of the company shall be liable to fine which
may extent to 25 thousands.
• If person acts as an Auditor or disqualified the
authority may appoint a qualified Auditor.

16. Tenure of Auditor
BCO 1962 section 35 (2)
• The Auditor shall hold office for 3 years.
• Shall not be removed from office for given
period of time.
• If company do so they require the approval of
the SBP.

17. Reading and inspection of report
CO 1984 Section 256
• The Auditor’s report shall read before the
company in general meeting and shall open to
inspection by any member of the company.

18. Signature on the Audit report
• Only a person appointed as an Auditor shall
sign the audit report.
• The report shall be dated and indicate the
place at which it is signed.

19. • Thank you 