The Company‘s Act section 161 covers the circumstances under which one is ineligible for appointment as an auditor section 161(1): A person or firm is not qualified for appointment as an auditor (or in the case of a firm, every partner of the firm) unless he is a holder of a practicing certificate issued pursuant to Section 21 of the Accountants Act 1977.
Such a certificate is issued under the following conditions: –
a) A person with CPA (III) qualification
b) A person with at least 3 years post graduate experience in auditing or an accounting environment
c) A person registered with RAB (Registration of Accountants Board)
d) A person registered with KASNEB
e) A person who is a member of ICPA (K.)
Section 161 (2): None of the following persons shall be qualified as an auditor of a company
a) A servant of a company
b) A person who is a partner or is in employment of an officer or servant of a company
c) A body corporate
Section 161 (3): A person cannot be qualified for appointment if he has by virtue of subsection (2) above, been disqualified as an auditor of a body corporate which is that company‘s subsidiary or holding company or subsidiary of that company‘s holding company.