Can the auditor also act as the liquidator?
In the past it was common practice for a company to turn to its auditors for advice on corporate simplification and for a partner of the audit firm to act as liquidator of a company within the group. In recent years there have been a number of laws and ethical pronouncements of professional bodies that restrict the services an auditor can provide to an audit client. The pronouncements of the professional bodies and the laws of various jurisdictions are quite complex. Dissolve has the following view: • If a subsidiary company is being liquidated and it has assets of any value then neither the auditor nor a partner of the auditor should act as the liquidator. The principle underlying this view is that an auditor should never conduct transactions on behalf of an audit client or enter into transactions with an audit client as the counterparty. • If a company is registered with the SEC in the USA then an accounting firm that is the auditor of the group should not allow another partner of th
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