Last week’s article dealt briefly with the requirements for the appointment of auditors of companies. There had been some confusion as to whether or not a practice certificate is needed to undertake audits other than those relating to the examination of the financial statements of an entity and expressing an opinion on them. Specifically, the issue at hand was whether some of the auditors who undertook the forensic audits of a number of State institutions should not have been in possession of practice certificates from the Institute of Chartered Accountants of Guyana (ICAG). The Ministry of Finance had commissioned some 40 such audits, of which more than half were undertaken by auditors who did not have practice certificates.
Today, we examine the requirements for a practice certificate in greater detail.
Company Law requirements
By Section 170 of the Companies Act 1991, an individual is eligible for appointment as auditor of a company if he is a member of the ICAG and is the holder of a practice certificate from the Institute. Here, we are referring to the statutory auditor or the external auditor of a company appointed at an annual general meeting of shareholders to audit the financial statements of the company and to report thereon to the shareholders at the next annual general meeting in terms of their fair presentation, compliance with the Act, stated accounting and financial reporting framework, and