Appointment and Rotation of Auditors

It is not mandatory for a private or personal liability company to appoint an auditor, unless the company is required to produce audited financial statements. If a private or personal liability company elects to appoint an auditor, or is required to do so, and they are not appointed at incorporation, they must be appointed by the directors or by an ordinary resolution of the shareholders within 40 business days of incorporation of the company.

An auditor may be re-appointed annually and may serve a maximum of five consecutive financial years. If an individual has served as the auditor or designated auditor of a company for 2 or more consecutive financial years, and then ceases to be the auditor or designated auditor, the individual may not be appointed again as the auditor or designated auditor of that company until after the expiry of at least two further financial years. If a company has appointed 2 or more persons as joint auditors, the company must manage the rotation in such a manner that all of the joint auditors do not relinquish office in the same year.

Rotation of auditors

In terms of section 92 of the Companies Act, 2008, the same individual may not serve as the auditor or designated auditor of a company for more than 5 consecutive financial years.

If an individual has served as the auditor or designated auditor of a company for 2 or more consecutive financial years, and then ceases to be the auditor or designated auditor, the individual may not be appointed again as the auditor or designated auditor of that company until after the expiry of at least two further financial years.

If a company has appointed 2 or more persons as joint auditors, the company must manage the rotation required by this section in such a manner that all of the joint auditors do not relinquish office in the same year.