Section 730 of The Companies Act No. 17 of 2015: Responsibilities of auditor
(1) In reporting on the annual financial statement of a company, the company’s auditor shall carry out such investigations as will enable the auditor to form an opinion—
(a) whether adequate accounting records have been kept by the company and returns adequate for their audit have been received from the company's branches not visited by the auditor;
(b) whether the company's individual financial statement is in agreement with the company's accounting records and returns; and
(c) in the case of a quoted company—whether the auditable part of the company's directors' remuneration report is in agreement with those accounting records and returns.
(2) If, in reporting on the annual financial statement of a company, the company's auditor forms the opinion—
(a) that the company has not kept adequate accounting records, or that returns adequate for their audit have not been received from the company's branches not visited by that auditor;
(b) that the company's individual financial statement is not in agreement with the company's accounting records and returns; or
(c) in the case of a quoted company—that the auditable part of its directors' remuneration report is not in agreement with those accounting records and returns,
the auditor shall state that opinion in the report.
(3) If the auditor fails to obtain all the information and explanations that, to the best of the auditor's knowledge and belief, are necessary for the purposes of the audit, the auditor shall state that fact in the report.
(4) If—
(a) the requirements of regulations made for the purpose of section 650 are not complied with in the annual financial statement; or
(b) in the case of a quoted company—the requirements of regulations made for the purpose of section 660 as to information forming the auditable part of the directors' remuneration report are not complied with in that report, the auditor shall include in the report, so far as it is reasonably practicable to do so, a statement giving the required particulars.
(5) If the directors of the company have prepared a financial statement and directors' report in accordance with the small companies regime and in the auditor's opinion they were not entitled so to do, the auditor shall state that fact in the report.
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- Section 731 - Auditor's right to information
(1) An auditor of a company—
(a) has a right of access at all times to the company's accounting records and financial statements, in whatever form they are held; and
(b) may require any of the...
- Section 732 - Auditor's right to information from foreign subsidiaries
(1) If a parent company has a subsidiary undertaking that is not a body corporate incorporated in Kenya, the auditor of the parent company may require it to obtain information or explanations for the...
- Section 733 - Auditor's rights to information: offences
(1) A person who makes a statement, whether oral or written containing information or explanations that the auditor requires, or is entitled to require, under section 731—
(a) knowing that the...
- Section 734 - Auditor's rights in relation to resolutions and meetings
(1) In relation to a written resolution proposed to be agreed to by a privatecompany, the company’s auditor is entitled to receive all such communications relating to the resolution as are required to...
- Section 735 - Auditor to sign and date auditor’s report
(1) Subject to subsection (2), an auditor shall—
(a) sign and date the auditor's report; and
(b) ensure that the auditor's name is prominently displayed in the report.
(2) If the auditor is a firm,...
- Section 736 - Name of auditor to be stated in published copies of auditor’s report
(1) A company shall not publish a copy of an auditor’s report that relates to thecompany unless the copy—
(a) state the name of the auditor and, if the auditor is a firm, the name of the person who...
- Section 737 - Circumstances in which auditors’ names may be omitted from published copies of auditors' report
(1) The auditor’s name and, if the auditor is a firm, the name of the person whosigned the report as senior statutory auditor, may be omitted from—
(a) published copies of the report; and
(b) the...
- Section 738 - Offences in connection with auditor's report
(1) This section applies—
(a) if the auditor is a natural person — to that person and any employee or agent of that person who is eligible for appointment as auditor of the company; and
(b) if the...
- Section 739 - Resolution removing auditor from office
(1) The members of a company may remove an auditor from office at any time.
(2) The power to remove an auditor under subsection (1) is exercisable only(a) by ordinary resolution at a meeting; and...
- Section 740 - Special notice required for resolution removing auditor from office
(1) Special notice is required for a resolution at a general meeting of a company removing an auditor from office.
(2) On receipt of notice of such an intended resolution, the company shall...
- Section 741 - Notice of resolution removing auditor from office
(1) Within fourteen days after a resolution is passed in accordance with section739, the company shall lodge a copy of the resolution with the Registrar for registration.
(2) If a company fails to...
- Section 742 - Rights of auditor who has been removed from office
A person who has been removed from office as auditor by resolution under 739 has the same rights in relation to a general meeting of the company— (a) at which the person's term of office would...
- Section 743 - Failure to re-appoint auditor: special procedure required for written resolution
(1) In this section, “outgoing auditor”, in relation to a private company, means the auditor of the company whose term of office ended, or is to end, at the end of the period for appointing...
- Section 744 - Failure to re-appoint auditor: special notice required for resolution at general meeting
(1) In this section, “outgoing auditor”—
(a) in relation to a private company—means the auditor of the company whose term of office ended, or is to end, at the end of the period for appointing...
- Section 745 - Resignation of auditor
(1) An auditor of a company may resign from office by lodging a notice to thateffect at the registered office of the company.
(2) The notice is not effective unless it is accompanied by the...
- Section 746 - Notice to Registrar of resignation of auditor
(1) Within fourteen days after an auditor of a company has resigned, the company shall lodge with the Registrar for registration a copy of the notice of resignation.
(2) If a company fails to lodge...
- Section 747 - Rights of resigning auditor
(1) This section applies if an auditor’s notice of resignation is accompanied by a statement of the circumstances connected with the resignation.
(2) A resigning auditor may deposit with the notice...
- Section 748 - Statement by auditor on ceasing to hold office to be lodged with company
(1) If an auditor of an unquoted company ceases for any reason to hold office, the auditor shall lodge at the registered office of the company a statement of the circumstances connected with the...
- Section 749 - Company’s duties in relation to statement
(1) This section applies in respect of a statement lodged under section 748 that states the circumstances in which an auditor of a company ceased to hold office.
(2) Within fourteen days after the...
- Section 750 - Auditor to lodge copy of statement with Registrar
(1) Unless within twenty-one days from and including the day on which the auditor lodged a statement in accordance with section 748 the auditor receives notice of an application to the Court under...
- Section 751 - Duty of auditor to notify appropriate audit authority
(1) An auditor who ceases to hold office before the end of the term for which the auditor was appointed shall notify the appropriate audit authority.
(2) The auditor shall state in the notice that...
- Section 752 - Duty of company to notify appropriate audit authority if auditor ceases to hold office before end of auditor’s term
(1) If an auditor ceases to hold office before the end of the auditor’s term of office, the company shall notify the appropriate audit authority of that fact.
(2) The company shall include in the...
- Section 753 - Appropriate audit authority to notify prescribed account body of cessation of auditor’s appointment
(1) As soon as practicable after receiving a notice under section 751 or 752,the appropriate audit authority—
(a) shall inform the Cabinet Secretary and the Institute of Certified Public Accountants...
- Section 754 - Meaning of “appropriate audit authority” for purpose of this Division
In this Division, “appropriate audit authority” means such body as is designated by the regulations as the appropriate audit authority for the purposes of this Division.
- Section 755 - Effect of casual vacancies
In an auditor of a company ceases to hold office for any reason, any surviving or continuing auditor or auditors may continue to act in relation to the company.
- Section 756 - Members’ power to request website publication of audit concerns
(1) If members of a quoted company propose to raise at the next general meeting of the company at which a financial statement of the company is to be presented a matter relating to—
(a) the audit of...
- Section 757 - Requirements as to website availability
(1) A quoted company to which a request under section 756 is made shall make the information to be published for the purposes of that section available on a website that—
(a) is maintained by or on...
- Section 758 - Website publication: company’s supplementary duties
(1) A quoted company shall, in the notice that it gives of its financial statementmeeting, draw attention to—
(a) the possibility of a statement being placed on a website in accordance with requests...
- Section 759 - Website publication: offences
(1) If a quoted company fails to comply with a requirement of section 757(1) or(3) or 758(1) or (3), the company, and each officer of the company who is in default, commit an offence and on conviction...
- Section 760 - Meaning of “quoted company” for purposes of sections 757 to 760
A company is a quoted company for the purposes of this Division only if it is a quoted company for the purpose of section 627 in relation to the financial year for which a financial statement of the...
- Section 761 - Provisions protecting auditors from liability to be void
(1) This section applies to any provision—
(a) for exempting an auditor of a company, to any extent, from liability that would otherwise be incurred by the auditor in connection with any negligence,...
- Section 762 - Indemnity for costs of successfully defending proceedings
Section 761 does not prevent a company from indemnifying an auditor against liability incurred in defending proceedings, whether civil or criminal, in which judgement is given in the auditor’s favour...
- Section 763 - Power of Court to grant relief in certain cases
(1) This section applies to the following persons—
(a) an officer of a company;
(b) a person employed by a company as an auditor. (whether or not the person is an officer of the company).
(2) If,...
- Section 764 - Liability limitation agreements
(1) For the purposes of this Division, an agreement is a liability limitationagreement if it purports to limit the extent of a liability owed to a company by its auditor in respect of any negligence,...
- Section 765 - Terms of liability limitation agreement
(1) A liability limitation agreement is not effective if it—
(a) purports to apply in respect of acts or omissions occurring in the course of the audit of financial statements for more than one...
- Section 766 - Authorisation of agreement by members of the company
(1) A liability limitation agreement is authorised by the members of the company only if it has been authorised under this section and that authorisation has not been withdrawn.
(2) A private company...
- Section 767 - Effect of liability limitation agreement
(1) A liability limitation agreement is not effective to limit the auditor’s liability toless than such amount as is fair and reasonable having regard to—
(a) the auditor's responsibilities under...
- Section 768 - Company to disclose liability limitation agreement
(1) A company that has entered into a limited liability agreement shall disclosedetails of the agreement—
(a) in the case of a company that prepares an individual financial statement—in notes to the...
- Section 769 - Quoted Companies: audit committee
(1) The directors of a quoted company shall ensure that the company has anaudit committee appointed by the shareholders of a size and capability appropriate for the business conducted by the...
- Section 770 - Quoted companies: corporate governance
(1) The audit committee of a quoted company shall—
(a) set out the corporate governance principles that are appropriate for the nature and scope of the company's business;
(b) establish policies and...
- Section 771 - Purpose of Part XXVIII
The purpose of this Part is to ensure—
(a) persons who are properly supervised and appropriately qualified are appointed as statutory auditors; and
(b) that audits by persons so appointed are...
- Section 772 - Eligibility for appointment as a statutory auditor
A natural person or firm is eligible for appointment as an auditor only if the person, or each partners of the firm—
(a) is the holder of a practicing certificate issued under section 21 of the...
- Section 773 - Ineligible person prohibited from acting as a statutory auditor
(1) A person shall not act as a statutory auditor of a company, or of a body of a kind prescribed by the regulations for the purposes of this section, unless the person is eligible for appointment as...
- Section 774 - Statutory auditor to be independent
(1) A person may not act as statutory auditor of an audited company if the person is—
(a) an officer or employee of the audited company;
(b) a partner or employee of the audited company, or a...
- Section 775 - Effect of lack of independence of statutory auditor
(1) If, at any time during the statutory auditor’s term of office, the auditor becomes prohibited from acting as such by section 774(1), the auditor shall immediately—
(a) resign from office;...
- Section 776 - Effect of appointment of a partnership as statutory auditor
(1) If a partnership is appointed as statutory auditor of an audited person, the appointment is, unless a contrary intention appears, an appointment of the partnership as such and not of the...
- Section 777 - Appropriate qualifications for appointment as a statutory auditor
A person holds an appropriate qualification for the purposes of this Part if the person holds a practising certificate issued under section 21 of the Accountants Act (No. 15 of 2008).
- Section 778 - Power of Cabinet Secretary to recognise qualifications of foreign auditors for purposes of this Act
(1) The Cabinet Secretary may, on the recommendation of the Institute of Certified Public Accountants of Kenya, by notice published in the Gazette, declare that persons of the following classes are to...
- Section 779 - Cabinet Secretary’s power to require eligible person to provide certain information
(1) The Cabinet Secretary may, by notice, require a person eligible forappointment as a statutory auditor to provide such information as that Secretary may reasonably require for the purposes of this...
- Section 780 - Application to Court by company member for order under section 796
(1) A member of a company may apply to the Court by application for an order under section 782 on the ground—
(a) that the company's affairs are being or have been conducted in a manner that is...