s.20Duties of auditor
20
Section 20Part 3 — OBLIGATIONS OF LICENSEES

Duties of auditor

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If an auditor, in the course of carrying out an audit of the accounts of a licensee under this Law, obtains information or suspects that the licensee 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 policyholders or creditors;
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 or the Regulations;
the Monetary Authority Law (2008 Revision);
the Money Laundering Regulations (2009 Revision); or
a condition of the licence,
the auditor shall immediately give the Authority written notice of his information or suspicion and, in the case of suspicion, his reason for that suspicion.
Without prejudice to subsection (8), if it appears to the Authority that an auditor has failed to comply with subsection (1), the Authority may disqualify him from being an auditor of a licensee, but the Authority may remove any disqualification imposed under this subsection if satisfied that the person in question will in future comply with subsection (1).
A licensee shall not appoint as an auditor a person disqualified under subsection (2).
Where the Authority has granted approval of an auditor under this Law, the approval may be revoked by the Authority if the Authority is of the opinion that the auditor is not sufficiently competent to carry out an audit of the accounts of a licensee or that, in all the circumstances, the auditor is incapable of carrying out the audit objectively.
When a licensee 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 to any other person 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 licensee 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 licensee 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 liable on summary conviction to a fine of one hundred thousand dollars or to imprisonment for a term of five years, or to both.

Cross References