Companies Act 2014 section 395

Restrictions on removal of statutory auditor

Section 395 sets out the conditions that must be satisfied before a company can validly pass a resolution to remove, replace, or decline to reappoint its statutory auditor.

• A resolution to remove an auditor from office is only effective if there are good and substantial grounds related to the auditor's conduct or performance of duties.
• A resolution to appoint a different auditor or to expressly prevent reappointment of the retiring auditor must, in the company's opinion, be in the company's best interests.
• Disagreements over accounting treatments or audit procedures cannot, on their own, justify any of these resolutions.
• The phrase "best interests of the company" cannot include any illegal or improper motive aimed at avoiding disclosures or concealing failures to comply with the Companies Act 2014.