When can shareholders waive the requirement for an audit of financial statements?

The correct choice indicates that shareholders can waive the requirement for an audit of financial statements when they unanimously pass a resolution waiving the audit. This practice reflects a fundamental principle in corporate governance, where shareholders have the authority to make significant decisions regarding the company's operations, including financial reporting obligations.

The ability to waive an audit stems from the understanding that shareholders typically have access to the financial information needed to make informed decisions. If all shareholders agree to waive the audit, it signifies a collective choice to take responsibility for the financial oversight in lieu of an independent audit, which can be seen as a cost-saving measure or a reflection of their trust in the management’s oversight of financial activities.

This option emphasizes the role of shareholder consent and governance in corporate matters, aligning with the notion that shareholders fundamentally control major corporate decisions, provided they act collaboratively and within legal frameworks.

The other choices suggest alternative scenarios that are not universally applicable or do not necessarily grant a waiver of audit requirements. For instance, non-profit status does not automatically exempt a company from audit requirements; it depends on specific legal regulations. The stipulation regarding the number of shareholders, fewer than ten, does not inherently provide a mechanism for waiving audits but rather relates to different compliance and governance rules. Lastly,