Appointment Of Auditor Resolution Template for South Africa
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What is a Appointment Of Auditor Resolution?
The Appointment of Auditor Resolution is a crucial corporate governance document required under South African law when appointing or reappointing an external auditor. This document becomes necessary either annually for certain categories of companies, upon the resignation or removal of an existing auditor, or when a company first becomes required to have an auditor under the Companies Act. The resolution must comply with Sections 90-93 of the Companies Act 71 of 2008 and, where applicable, the Auditing Profession Act and JSE Listing Requirements. It typically follows an audit committee recommendation (for public companies) or board selection process, and must include specific confirmations about the auditor's independence and qualifications. The document serves as evidence of proper corporate governance and regulatory compliance in the auditor appointment process.
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About the Appointment Of Auditor Resolution
An Appointment of Auditor Resolution is a formal corporate document that records your company's decision to appoint or reappoint external auditors. Under South African law, this resolution is essential for maintaining compliance with statutory auditing requirements and demonstrating proper corporate governance practices to stakeholders and regulatory authorities.
When do you need this document?
You need this resolution whenever your company appoints or changes auditors. This includes annual reappointments for public companies, initial appointments when your company first requires an auditor under the Companies Act, and replacements when existing auditors resign or are removed. Listed companies must also use this document when rotating audit partners or firms to comply with JSE independence requirements. Additionally, you'll need this resolution if your company's status changes and now requires statutory auditing, such as when exceeding the public interest score threshold or becoming a state-owned company.
Key legal considerations
Your resolution must confirm the auditor's independence and qualifications under the Auditing Profession Act. You need to verify that the proposed auditor is registered with the Independent Regulatory Board for Auditors (IRBA) and meets competency requirements for your company's specific industry or size. The document must record proper authority for the appointment, whether through board resolution or shareholder approval as required by your company's circumstances. For public companies, you must demonstrate that the audit committee has recommended the appointment and assessed the auditor's suitability. The resolution should also address any conflicts of interest and confirm compliance with mandatory audit firm rotation requirements where applicable.
Legal requirements in South Africa
Under Sections 90-93 of the Companies Act 71 of 2008, your company must follow specific procedures for auditor appointments. Public companies require shareholder approval through ordinary resolution, while private companies may appoint auditors through board resolution unless the MOI requires otherwise. You must ensure the resolution includes the auditor's full details, registration number, and confirmation of their acceptance of the appointment. For JSE-listed companies, additional requirements include compliance with audit partner rotation rules and disclosure of audit fees. The resolution must be filed with CIPC where required and retained in your company's statutory records. You also need to notify the previous auditor in writing and comply with any handover requirements between audit firms.
GOVERNING LAW
Applicable law
This Appointment Of Auditor Resolution is drafted to comply with South Africa law. Key legislation includes:
Auditing Profession Act 26 of 2005: Regulates the auditing profession and sets requirements for registered auditors, including their qualifications and professional standards
Companies Regulations 2011: Provides detailed procedural requirements for company operations, including specific requirements for auditor appointments and related documentation
JSE Listing Requirements: For listed companies, provides additional requirements for auditor appointments and rotation requirements
King IV Report on Corporate Governance: While not legislation, provides important governance principles regarding auditor independence, appointment procedures, and audit committee responsibilities
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