Chapter 5: Auditor
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Article A: Appointment of Auditor
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154. (a) A company shall appoint an auditor to
audit its annual financial reports and to express an opinion on them
(hereinafter “an act of audit”); the Minister may prescribe that certain other
acts performed by an auditor by law shall be considered acts of audit for the
purposes of this Chapter.
(b) An auditor shall be
appointed at every annual general meeting and shall serve in that position until
the end of the following annual general meeting; however, the general meeting
may, if such a provision exists in the articles of association, appoint an
auditor who may serve as such for a longer period of time, which period shall
not extend beyond the end of the third annual general meeting after that at
which he was appointed.
(c) In a private company
where the provisions of section 61 prevail, an auditor may be appointed to serve
in such position until the date of completion of a single act of audit, or, if
the articles of association contain a provision to such effect, until the
completion of three acts of audit.
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Duty to appoint auditor
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155. (a) The board of directors may, at any time
prior to the first annual general meeting, appoint the company’s first auditor
and determine his salary; the first auditor appointed shall serve until the
termination of the first annual general meeting.
(b) The provisions of
section 154(c) shall apply to the termination of service of an auditor appointed
by the board of directors in a private company in which the provisions of
section 61 prevail.
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Appointment of first auditor
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156. A company
may appoint several auditors to perform the act of audit jointly.
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Joint auditors |
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157. Where the position of auditor becomes vacant
and the company has no additional auditor, the board of directors of the company
shall convene a special general meeting, at the earliest possible date, on the
agenda of which shall be the appointment of an auditor.
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Appointment by special general meeting
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158. (a) Notwithstanding the provisions of section
154, companies that are inactive and in which the public has no interest
pursuant to the provisions and the conditions prescribed by the Minister under
subsection (b) (hereinafter an “inactive company”) may resolve in general
meeting that an auditor shall not be appointed.
(b) The Minister may
prescribe provisions and conditions pursuant to which a company shall be
considered an inactive company.
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Inactive companies
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159. (a) Where the auditor ceases to serve a
company and no other person is appointed in his stead as prescribed by section
157, the company shall notify the Registrar of such within ninety days of the
date on which the auditor ceased so to serve; however, the giving of such notice
to the Registrar shall not derogate from the company’s obligation to appoint an
auditor, as long as an auditor is not appointed under subsection (b); where the
company appoints an auditor after giving notice to the Registrar, it shall
notify the Registrar of this within fourteen days.
(b) Where the Registrar
receives notice of the auditor ceasing to act, as provided in subsection (a),
and so long as the Registrar has not received a notice of appointment of a new
auditor, the Registrar may appoint an auditor who shall serve in such position
until the end of the next annual general meeting, and may determine the salary
to be paid to such person by the company.
(c) The Minister may
prescribe provisions and conditions for the appointment of an auditor to be
appointed by the Registrar, the commencement of such person’s service and his
salary. |
Appointment by Registrar
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Article B: Independence
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160. (a) The auditor shall be independent of the
company, directly and indirectly.
(b) The Minister may
prescribe provisions relating to the independent status of the auditor,
including provisions relating to the independence of accountants who are
partners in a partnership which is the auditor, or relating to the independence
of the accountants who are shareholders in a company of accountants that is an
auditor.
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Independence of auditor
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161. Where an act of audit is performed at a time
when there were relations of dependence under section 160(b), an additional
audit shall be performed by another auditor, unless at the time the matter was
made known to the board of directors five years have passed since the date on
which the said act of audit was performed. |
Duty to perform additional audit
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