Section 138 - Qualification of an auditor

(1) A person is qualified for appointment as an auditor of a private or public company, if that person is,

(a) qualified and licensed in accordance with the Chartered Accountants Act, 1963 (Act 170); and

(b) not disqualified under subsection (2).

(2) A person is disqualified for appointment as an auditor, if that person is

(a) an officer of the company or of an associated company;

(b) a partner of, or in the employment of, an officer of the company or of an associated company;

(c) an infant;

(d) found by a court of competent jurisdiction to be a person of unsound mind;

(e) a body corporate, except that a member of an incorporated partnership may be appointed in the manner provided by subsection (2) of section 139;

(f) one in respect of whom an order has been made under section 177 so long as the order remains in force unless leave to act as an auditor of the company concerned has been granted by the Court in accordance with that section;

(g) an undischarged bankrupt, unless that person has been granted leave to act as an auditor of the company concerned by the Court by which the adjudication as bankrupt was made; or

(h) for the time being disqualified from acting as an auditor of a company by order of the Registrar under subsection (4).

(3) Paragraph (b) of subsection (2) does not disqualify a person from being appointed as an auditor by reason only of the fact that, that person is a partner or in the employment of a person acting as Company Secretary of the company or of an associated company.

(4) The Registrar may, subject to a legislative instrument, disqualify a person otherwise qualified from acting as an auditor of a company and may at any time remove that disqualification.

(5) A person aggrieved by a decision of the Registrar under subsection (4) has a right to appeal to the Court.

(6) A person not qualified for appointment as an auditor who acts as an auditor, commits an offence and is liable on summary conviction to a fine of not less than three hundred and twenty-five penalty units and not more than seven hundred and fifty penalty units and the company by whom that person is appointed and an officer of that company that is in default are liable each to pay to the Registrar an administrative penalty of seven hundred and fifty penalty units.