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manage the rotation in such a manner that all of the joint auditors do not relinquish
office in the same year.
Section 93 sets out the rights and restricted functions of auditors who may not perform
any services that would place him in a conflict of interest as determined by the
Independent Regulatory Board for Auditors (IRBA) in terms of the Auditing Profession Act
or any other services determined by its audit committee.

Section 94: Election of an Audit Committee
At each AGM, a SOC Ltd, public company or one that is required only by its MOI to have
an audit committee must elect an audit committee. The shareholders and not the board
of directors must elect an audit committee for the following financial year (subject to
certain exemptions).
The audit committee must have at least three members who must also be independent
non-executive directors of the company. In terms of the Act, members of the audit
committee must also meet specific qualifications.
At least one third of the members of a company’s audit committee at any particular
time must have academic qualifications or experience in, economics, law, corporate
governance, finance, accounting, commerce, industry, public affairs or human resource
management.
The audit committee is required to comply with specific statutory duties as are clearly set
out in the Act in Section 94(7), in respect to each financial year for which it is appointed.
The audit committee is required to report on the processes that were followed in
appointing auditors and in carrying out their responsibilities, which includes determining
the fees to be paid to the auditor and the auditor’s terms of engagement.
They are also must comment on the annual financial statements and the policies and
procedures that were followed by the company and the appointed auditors, detailing
whether the audit process was conducted independently.
A company must pay all expenses reasonably incurred by its audit committee including
the fees of any consultant or specialist engaged by the committee to assist it with its
duties (if the audit committee considers it appropriate).
If a holding company has an audit committee, the subsidiary does not require one, if the
audit committee of the holding company will perform the functions required under this
section on behalf of that subsidiary company.

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