Article C: Ending of Auditor’s Term of Office
162. (a) The general meeting may terminate the auditor’s term of office.
(b) Where a public company has on its agenda the termination of service or non-renewal of appointment of an auditor, the view of the audit committee shall be made known to the general meeting, after the auditor has been given reasonable opportunity to make his position known to the meeting.
Ending term of office
163. (a) Where the board of directors is aware of the existence of relations of dependence under section 160(b), it shall notify the auditor without delay that he is to take action to end such dependence immediately; where the dependence is not brought to an end, the board of directors shall convene a special general meeting within a reasonable time, on the agenda of which shall be the termination of service of the auditor.
(b) A general meeting convened in accordance with the provisions of subsection (a) shall decide on the termination of service of the auditor; however, the general meeting may, after hearing the position of the auditor, decide not to accept the proposal of the board of directors to terminate his service, if it finds that the auditor is not dependent upon the company.
Termination of service due to dependence
164. (a) The board of directors shall give the auditor a reasonable opportunity to make his position known to the general meeting that has the termination of service or non-renewal of his appointment on its agenda, and this shall include an invitation to the auditor to take part in the meeting.
(b) Where the auditor resigns in circumstances in which the shareholders of the company have an interest, he shall notify the board of directors of the company thereof.
(c) Without derogating from the provisions of any law, the board of directors shall notify the shareholders of the reasons of the auditor for his resignation, in such detail as the board of directors shall see fit, and it may also notify them of its position in this regard.
Position of auditor
Article D: Fees Payable to Auditor
165. (a) Fees due to the auditor for acts of audit shall be determined by the general meeting, or by the board of directors if authorized therefor by the general meeting, and in accordance with the conditions of such authorization or, where there is a provision for such in the articles of association, in accordance with such provision.
(b) Where a fee is determined for an act of audit by the board of directors, the board of directors shall inform the annual meeting of such fee.
Fees of auditor
166. (a) A company shall not make the payment of fees of the auditor dependent on conditions that restrict the manner of performing acts of audit, or that connect the results of the audit to such payment.
(b) Neither a company, nor any person acting on its behalf, shall indemnify the auditor, directly or indirectly, for an obligation imposed upon him for a breach of his professional liability or for the non-performance of any other duty imposed upon him by law.
Prohibition against stipulation of salary or grant of indemnity
167. (a) The fees of an auditor for additional services to the company that are not acts of audit shall be determined by the board of directors; however, it may be provided in the articles of association that fees for such services be determined by the general meeting.
(b) The board of directors shall inform the annual meeting as to fees of the auditor for additional services.
Fee for additional services
Article E: Powers, Duties and Responsibilities of Auditor
168. (a) The auditor may at any time inspect those documents of the company required by him for the purpose of fulfilling his function and receive explanations with regard to them.
(b) The auditor may participate in any general meeting at which financial reports are submitted in respect of which an act of audit is performed, and at any meeting of the board of directors dealing with the approval of financial reports or at any meeting of the board of directors convened in accordance with section 169; the board of directors shall notify the auditor of the place and time at which the general meeting or meeting of the board of directors is to be convened.
Powers of auditor
169. (a) Where the auditor is aware, as a result of an act of audit, of substantial defects in inspection of the company’s accounting, it shall report thereon to the chairman of the board of directors.
(b) Where the auditor reports on defects referred to in subsection (a), the chairman of the board of directors shall, without delay, convene a meeting of the board of directors to discuss the matters brought to his attention.
Duty to report
170. (a) The auditor shall be liable to the company and its shareholders for the contents of his opinion regarding the financial reports.
(b) The provisions of subsection (a) shall not preclude the existence the auditor’s liability under any law.
Responsibility for opinion