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Companies Act 1993

Accounting records and financial reporting - Miscellaneous auditing provisions

207U: Replacement of auditor

You could also call this:

“How to properly replace your company's auditor”

If you want to replace your company’s auditor, you need to follow some rules. You can’t just replace an auditor who is qualified without doing a few things first.

You must give your current auditor at least 20 working days’ notice in writing that you want to replace them. This gives them time to prepare.

You also need to give your auditor a fair chance to talk to your shareholders about the change. They can do this by writing a letter or by speaking at a shareholders’ meeting. The auditor gets to choose how they want to do this.

If your auditor does decide to talk to the shareholders about being replaced, your company has to pay them a fair amount for their time and any costs they have.

These rules are there to make sure that changing auditors is done fairly and that your current auditor has a chance to speak up if they need to.

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View the original legislation for this page at https://legislation.govt.nz/act/public/1986/0120/latest/link.aspx?id=DLM6041596.

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“Rules for automatically reappointing a company's auditor at annual meetings”

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“Auditor's steps for leaving or not continuing the job”

Part 11 Accounting records and financial reporting
Miscellaneous auditing provisions

207UReplacement of auditor

  1. A company must not appoint a new auditor in the place of an auditor who is a qualified auditor, unless—

  2. at least 20 working days' written notice of a proposal to do so has been given to the auditor; and
    1. the auditor has been given a reasonable opportunity to make representations to the shareholders on the appointment of another person either in writing or by the auditor or the auditor's representative speaking at a shareholders' meeting (whichever the auditor may choose).

      1. The auditor is entitled to be paid by the company reasonable fees and expenses for making the representations to shareholders.

      Notes
      • Section 207U: inserted, on , by section 30 of the Financial Reporting (Amendments to Other Enactments) Act 2013 (2013 No 102).