Plain language law

New Zealand law explained for everyone

Companies Act 1993

Accounting records and financial reporting - Miscellaneous auditing provisions

207R: Resignation and casual vacancy

You could also call this:

“How auditors can resign and how companies should handle their departure”

If you’re an auditor for a company, you can quit your job whenever you want. You just need to tell the company’s board in writing that you’re leaving. When this happens, the company has to let all its shareholders know about it as soon as possible.

If the company doesn’t tell its shareholders that the auditor has quit, it’s breaking the law. The company can be punished as described in section 373(2). Also, each of the company’s directors can be punished as described in section 374(2).

When an auditor leaves unexpectedly, the company’s board can choose a new auditor to take their place. But while they’re looking for a new auditor, if there’s still another auditor working for the company, that person can keep doing the job.

This text is automatically generated. It might be out of date or be missing some parts. Find out more about how we do this.

View the original legislation for this page at https://legislation.govt.nz/act/public/1986/0120/latest/link.aspx?id=DLM6041593.

Topics:
Business > Industry rules
Business > Fair trading
Previous

207Q: Registrar may appoint auditor, or

“Registrar can choose an auditor if a company doesn't appoint one”

Next

207S: Auditor's fees and expenses, or

“How auditors are paid for their work”

Part 11 Accounting records and financial reporting
Miscellaneous auditing provisions

207RResignation and casual vacancy

  1. An auditor may resign at any time by giving written notice to the board of the company, and the company must, as soon as practicable, notify its shareholders of the auditor's resignation.

  2. If a company fails to comply with subsection (1),—

  3. the company commits an offence and is liable on conviction to the penalty set out in section 373(2); and
    1. every director of the company commits an offence and is liable on conviction to the penalty set out in section 374(2).

      1. The board of a company may fill any casual vacancy in the office of auditor, but while the vacancy remains the surviving or continuing auditor, if any, may continue to act as auditor.

      Notes
      • Section 207R: inserted, on , by section 30 of the Financial Reporting (Amendments to Other Enactments) Act 2013 (2013 No 102).
      • Section 207R(2): replaced, on , by section 59 of the Companies Amendment Act 2014 (2014 No 46).