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;

  1. Death of the auditor
  2. Incapacitation
  3. Resignation

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:

  1. Must be a CPA finalist (Certified Public Accountant) i.e. has passed all exams that are set by KASNEB. Kenya Accountants and Secretaries National Examination Board.
  2. Member of ICPAK (Institute of Certified Public Accountants of Kenya) to ensure adherence to professional ethics.
  3. Have post qualification experience in an auditing environment for 2 years.

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.

  1. A person who is a partner of or in the employment of an officer or servant of the company (unless it is a private company)
  2. Persons who are disqualified form appointment as auditor of the company’s subsidiary or holding company or subsidiary of the company’s holding company and
  3. A body corporate.


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:

  1. The first auditors. These powers cease after the company’s first AGM.
  2. Auditors to fill a casual vacancy arising from the death, incapacitation or resignation of the company’s auditors.

The registrar of companies can appoint the auditors of a company if the shareholders and directors fail to do so.