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Section 775 of The Companies Act No. 17 of 2015: 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; and
(b) give notice to the audited person that the auditor has resigned because of lack of independence.
(2) A person who—
(a) acts as a statutory auditor in contravention of section 774(1);
(b) fails to give the notice referred to in subsection (1)(b);
(c) has been convicted of an offence under paragraph (a) and after conviction continues to act as a statutory auditor in contravention of section 774(1); or
(d) has been convicted of an offence under paragraph (b) and after conviction, continues to fail to give the notice in subsection (1)(b), commits an offence and is liable on conviction to a fine not exceeding one million shillings or to imprisonment for a term not exceeding two years, or to both.
(3) In proceedings against a person for an offence under this section, it is a defence to show that the defendant did not know and had no reason to believe that the defendant was, or had become, prohibited from acting as statutory auditor of the audited person by section 774(1).

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Disclaimer: This document is not to be taken as legal advise.

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