Section 19Part 1 — Securities Investment Business Act
Duty of auditor
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If an auditor, in the course of carrying out an audit or producing a report under section 17(2A)(e) becomes aware of or has reasonable grounds to believe that the licensee or registered person —
is or is likely to become unable to meet its obligations as they fall due;
is carrying on business in breach of this Law or any regulations made hereunder;
is carrying on or attempting to carry on business in a manner that is prejudicial to its clients or is winding up its business voluntarily in a manner that is prejudicial to its clients or creditors; or
is carrying on or attempting to carry on business without maintaining any or sufficient accounting records or record keeping systems to enable the auditor to carry out an audit or produce a report under section 17(2A)
, the auditor shall immediately give the Authority and the licensee or registered person written notice of that person’s knowledge or belief giving reasons therefor, and an auditor who contravenes this provision is liable to removal by the Authority from its list of approved auditors.
A reference in this section to an auditor carrying out an audit or preparing a report on a licensee or registered person includes an auditor who was engaged to carry out such an audit or prepare such a report or who was in the course of so doing but resigned before completion or whose contract to carry out same was otherwise terminated.
No duty to which an auditor of a licensee or a registered person may be subject shall be regarded as contravened by reason of that person’s communicating in good faith to the Authority any information or opinion on a matter specified in subsection (1) or providing any information or opinion in response to a request made by the Authority pursuant to a power conferred by this Law.
An auditor shall not be liable in damages for anything done or omitted to be done in the discharge or proposed discharge of that person’s functions under this 20 Law in relation to the preparation of a report under section 17(2A)(e) or in relation to any notice given under subsection (1) unless it is shown that the act or omission was in bad faith.