723. There are divergent views on whether company auditors should be appointed until ‘death or removal or resignation’ as provided for in section 327 of the Law or for some fixed period.
724. Under section 327 of the Law, a person or firm appointed as auditor of a company holds office until death or removal or resignation. Section 329 of the Law provides that:
(a) an auditor may be removed from office by resolution of the company at a general meeting of which special notice has been given; and
(b) an auditor of a public company may resign if the ASC has consented to the resignation (the auditor of a proprietary company does not need the ASC’s consent to resign).
725. Options available in respect of the tenure of auditors include:
(a) retaining the existing requirements;
(b) retaining existing requirements but with a fixed minimum term of appointment;
(c) termination of the audit appointment after a specific period of time, with or without the opportunity to reappoint the existing auditor;
(d) requiring, where the auditor is a firm, the rotation of the responsible partner after a specified period of time;
(e) placing, in the case of a sole practitioner or a firm, a restriction on the period for which the sole practitioner or firm may hold office; and
(f) requiring the appointment of a second or review partner within the auditor’s firm or, in the case of a sole practitioner, from another firm.
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