S. 159 (6) “The directors may fill any casual vacancy in the office of the auditor, but while any such vacancy continues the surviving or continuing auditor(s), if any may act.”
A casual vacancy may arise out of any of the following reasons;
i.e. a casual vacancy arises when any of the above circumstances arise leaving the office of the auditor vacant before the expiry of the term in office under the contract.
The directors of the company may fill a casual vacancy in the office of the auditor.
S.161 (1) “ A person or firm shall not be qualified for appointment as auditor of a company unless he or, in the case of a firm, every partner in the firm is the holder of a practicing certificate issued pursuant to s.21 of the Accounts Act’. The conditions set out in the Accountants Act include;
Auditor must meet the following qualifications in Kenya:
Having fulfilled these requirements the practising certificate is issued upon application by RAB (Registration of Accountants Board).
Under s.161 (2) none of the following persons shall be qualified for appointment as auditors of a company.
An officer or servant of the company.
The first three persons are disqualified because of lack of independence/ to safeguard the auditor’s independence. A body corporate (or company) is excluded because an audit is a personal service. It would be inappropriate for one legal person to oversee the activities of another. A Company has limited liability whereas the auditor must be held personally responsible for the quality of his work and the opinion that he gives.
Directors may appoint:
The registrar of companies can appoint the auditors of a company if the shareholders and directors fail to do so.