Section 264. Company auditors

(1) A person shall not—

(a) knowingly consent to be appointed as an auditor for any company;

(b) knowingly act as an auditor for any company; and

(c) prepare, for or on behalf of a company, any report required by this Act to be prepared by an approved company auditor if—

(i) he is not an approved company auditor;

(ii) he is indebted to the company or to a corporation that is deemed to be related to that company by virtue of section 7 in an amount exceeding twenty-five thousand ringgit;

(iii) he is—

(A) or his spouse is an officer of the company;

(B) a partner, employer or employee of an officer of the company;

(C) a partner or employee of an employee of an officer of the company; or

(D) a shareholder or his spouse is a shareholder of a corporation whose employee is an officer of the company;

(iv) he is responsible for or if he is the partner, employer or employee of a person responsible for the keeping of the register of members or the register of debenture holders of the company;

(v) he is an undischarged bankrupt within or outside Malaysia except with leave of the Court; or

(vi) he has been convicted of any offence involving fraud or dishonesty punishable with imprisonment for three months or more.

(2) For the purposes of subparagraph (1)(c)(iii), a person shall be deemed to be an officer of a company if he is an officer of a corporation that is deemed to be related to the company by virtue of section 7 if he has been an officer or promoter of the company or such a corporation at any time within the preceding period of twelve months, unless the Minister directs otherwise.

(3) For the purposes of this section, a person shall not be deemed to be an officer by reason only of him having been appointed as an auditor of a corporation.

(4) A firm of auditors shall not knowingly consent to be appointed, and shall not knowingly act, as an auditor for any company and shall not prepare, for or on behalf of a company, any report required by this Act to be prepared by an approved company auditor unless—

(a) all the partners of the firm resident in Malaysia are approved company auditors and, where the firm is not registered as a firm under any law for the time being in force, a return showing the full names and addresses of all the partners of the firm has been lodged with the Registrar; and

(b) no partner of the firm is disqualified under subsection (1) from acting as the auditor of the company.

(5) A company shall not appoint a person or a firm as an auditor unless prior to the appointment—

(a) that person has consented in writing to act as the auditor; or

(b) in the case of a firm, at least one partner of the firm has consented in writing.

(6) The appointment of a firm in the name of the firm as auditors of a company shall take effect as an appointment as auditors of the company of the persons who are partners of that firm at the time of the appointment.

(7) The appointment of a firm in the name of the limited liability partnership or foreign limited liability partnership as auditors of a company shall take effect as an appointment as auditors of the company as if—

(a) the partners of the limited liability partnership, whether the partners at the time the limited liability partnership was appointed as auditor or later; and

(b) employees of the limited liability partnership who are approved company auditors in that limited liability partnership, whether employed at the time the limited liability partnership was appointed as auditor or later,

are appointed as auditors of the company.

(8) Any person who is or any firm which is appointed as an auditor contravenes subsection (1) or (4) respectively commits an offence and shall, on conviction, be liable to a fine not exceeding one hundred thousand ringgit.