Section 22Part 11 — Annual Audit and Statement of Accounts
Obligations of auditors
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If an auditor, in the course of carrying out an audit of the accounts of a society under this Law, obtains information or suspects that the society is —
unable or likely to become unable to meet its obligations as they fall due;
carrying on or attempting to carry on business or winding up its business voluntarily in a manner that is prejudicial to its members;
carrying on or attempting to carry on business without keeping any or sufficient accounting records to allow its accounts to be properly audited;
carrying on or attempting to carry on business in a fraudulent or criminal manner; or
carrying on or attempting to carry on business otherwise than in compliance with —
this Law,
the Monetary Authority Law (2020 Revision); or
the Anti-Money Laundering Regulations (2020 Revision),
the auditor shall immediately give the Authority written notice of the information or suspicion and, in the case of suspicion, the auditor’s reason for that suspicion.
Without prejudice to subsection (7), if it appears to the Authority that an auditor has failed to comply with subsection (1), the Authority may issue a recommendation to Cabinet to disqualify the auditor from being an auditor of a society.
Where the Authority is of the opinion that the auditor is not sufficiently competent to carry out an audit of the accounts of a society or that, in all the circumstances, the auditor is incapable of carrying out the audit objectively, the Authority shall issue to Cabinet a recommendation to revoke the appointment of the auditor.
When a society changes its auditor, the Authority may require the former auditor to explain the reasons for the change.
A person carrying out or charged with the carrying out of any duty, obligation or function under this section shall not incur civil liability for anything done or omitted to be done in respect of the discharge or purported discharge of that duty or function unless it is shown that the act or omission concerned was in bad faith.
A reference in this section to an auditor carrying out an audit of the accounts of a society includes a reference to an auditor who was engaged to carry out such an audit or who was in the course of carrying out such an audit but resigned before carrying out or completing the audit or whose contract to carry out or complete the audit was otherwise terminated.
Nothing in subsection (1) shall impose on an auditor carrying out an audit of the accounts of a society an obligation to do anything that the auditor would not otherwise be required to do in accordance with generally accepted auditing standards, other than the obligation to provide notice and reasons to the Authority.
A person who contravenes subsection (1) commits an offence and is liable on summary conviction to a fine of twenty thousand dollars.
Cross References
- Section of Monetary Authority Law
the Monetary Authority Law (2020 Revision)
- Section of Anti Money Laundering Regulationsexternal
the Anti-Money Laundering Regulations (2020 Revision)