Point in Time
Act No: No. 15 of 2008
Act Title: ACCOUNTANTS
[ Date of commencement: 30th December, 2008. ]
[ Date of assent: 24th December, 2008. ]
Arrangement of Sections
PART I – PRELIMINARY
1.
Short title

This Act may be cited as the Accountants Act, 2008.

PART II – ESTABLISHMENT OF VARIOUS BODIES
A – Institute of Certified Public Accountants of Kenya
3.
Establishment of Institute
(1)

There is established an Institute to be known as the Institute of Certified Public Accountants of Kenya.

(2)

The Institute—

(a)

shall be a body corporate, capable of suing and being sued in its corporate names;

(b)

shall have a common seal which shall be kept in such manner as the Council may direct;

(c)

may with the prior approval of the Minister, borrow, lend or otherwise raise money in such usual manner, including by way of executing securities and guarantees, as it may from time to time determine;

(d)

may acquire, hold, develop and dispose of movable or immovable property;

(e)

may acquire, hold and dispose of investments in other enterprises subject to approval by the Minister for the time being responsible for Finance.

(3)

All courts, judges and other persons acting judicially shall take judicial notice of the seal of the Institute affixed to a document and shall presume that it was duly affixed.

(4)

The provisions of the First Schedule shall have effect with respect to the Institute.

6.
Honorary Fellows
(1)

Where the Council considers that a person, not being a member of the Institute has rendered special services to the Institute or the accountancy profession, the Council may invite such a person to become an Honorary Fellow of the Institute.

(2)

An Honorary Fellow shall not be a member of the Institute.

7.
Chairman of the Institute
(1)

There shall be a chairman of the Institute who shall be elected in the manner provided in paragraph 1 of the First Schedule.

(2)

A member seeking election as chairman shall be a person who—

(a)

has been a member of the Institute for a continuous period of not less than seven years;

(b)

has served on the Council or its Committees for at least one year; and

(c)

has not be disqualified under the provisions of the Second Schedule.

B – Council of the Institute
9.
The Council
(1)

The Institute shall be governed by a Council to be known as the Council of the Institute.

(2)

Subject to this Act, all acts and things done in the name of, or on behalf of, the Institute, by the Council or with the authority of the Council shall be deemed to have been done by the Institute.

(3)

The Council shall issue standards of professional practice, including accounting and auditing standards, which shall form the basis of accountancy practice for members of the Institute in the preparation, verification and auditing of financial statements.

(4)

The Council may with the approval of the Minister, issue by-laws, regulations and guidelines to govern matters affecting the operations of the Institute and practice by members of the Institute.

10.
Committees of the Council
(1)

The Council may establish such committees as are necessary for the performance of the functions of the Institute and may, subject to the provisions of this Act, delegate powers conferred on it to such committees.

(2)

The provisions of the Second Schedule shall have effect with respect to the Council.

11.
Membership of the Council

The Council shall consist of eleven members as follows—

(a)

a chairman elected in accordance with section 7;

(b)

one member to represent the Ministry responsible for matters relating to Finance;

(c)

one member to represent the Capital Markets Authority;

(d)

one member to represent the Examinations Board;

(e)

one member appointed by the Minister to represent a profession other than accountancy; and

(f)

six other members elected in the manner provided in the Second Schedule.

12.
Secretary to the Council
(1)

There shall be a Secretary to the Council who shall be appointed by the Council.

(2)

The Secretary to the Council shall hold and vacate the office of Secretary in accordance with the terms of the instrument of appointment to that office.

(3)

In addition to the functions which he is required to exercise and perform by or under this Act, the Secretary to the Council shall exercise and perform such other functions as the Council may, from time to time, determine.

13.
Registration Committee
(1)

There is established a Registration and Quality Assurance Committee (hereinafter known as the Registration Committee) consisting of seven members to be appointed by the Minister as follows—

(a)

a chairman;

(b)

one person to represent the Ministry responsible for Finance;

(c)

one person nominated by the Examinations Board;

(d)

one person nominated by the Kenya National Audit Office;

(e)

two persons nominated by the Council to represent the Institute; and

(f)

one person, not being a member of the Institute, nominated by the Council to represent the users of accountancy services.

(2)

The functions of the Registration Committee shall be to—

(a)

receive, consider and approve applications for registration as an accountant and grant of practising certificates and annual licences in accordance with the provisions of this Act;

(b)

monitor compliance with professional, quality assurance and other standards published by the Council for observance by the members of the Institute;

(c)

prescribe regulations to govern quality assurance programmes, including actions necessary to rectify deviations from published standards;

(d)

where appropriate and based on the results of a quality assurance review, recommend to the Council that a member’s conduct be referred for inquiry under section 32;

(e)

advise the Council on matters pertaining to professional and other standards necessary for the achievement of quality assurance; and

(f)

perform any other functions incidental to the fulfilment of its objectives under this Act.

(3)

In the performance of its functions under this section, the Registration Committee may undertake such investigations as it deems appropriate, and may requisition evidence, examine records and documents prepared or held by, or likely to be availed to, the member under investigation.

(4)

Where the Registration Committee makes a recommendation under subsection (2)(d) the Council shall refer the matter for inquiry under section 32.

(5)

The Disciplinary Committee shall consider as evidence the results of the investigation undertaken by the Registration Committee in an inquiry referred to it under subsection (4).

(6)

The Council shall provide the Registration Committee with such facilities and resources as are necessary to enable it to competently discharge its functions.

(7)

In the exercise of its functions under this Act, the Registration Committee shall regulate its own procedure and shall not work under the direction of any person or persons.

(8)

The Secretary to the Council shall serve as the Secretary to the Registration Committee, and may, with the consent of the person presiding at a meeting, take part in the deliberations on any matter arising at the meeting, but shall not be entitled to vote on any such matter.

(9)

The provisions of the Third Schedule shall have effect with respect to the Registration Committee.

C – Kenya Accountants and Secretaries National Examinations Board
14.
The Examinations Board
(1)

There is established a board to be known as the Kenya Accountants and Secretaries National Examinations Board.

(2)

The Examinations Board—

(a)

shall be a body corporate;

(b)

shall have a common seal which shall be kept in such manner as the Examinations Board directs;

(c)

may with the prior approval of the Minister, borrow, lend or otherwise raise money in such usual manner, including by way of executing securities and guarantees, as it may from time to time determine;

(d)

may acquire, hold, develop and dispose of property, whether movable or immovable, in the normal course of business;

(e)

may acquire, hold and dispose of investments in other enterprises subject to approval by the Minister; and

(f)

may sue and be sued in its corporate name.

(3)

All courts, judges and other persons acting judicially shall take judicial notice of the seal of the Examinations Board affixed to a document and shall presume that it was duly affixed.

(4)

The provisions of the Fourth Schedule shall have effect with respect to the Examinations Board.

15.
Membership of the Examinations Board
(1)

The Examinations Board shall consist of eleven members appointed by the Minister, of whom—

(a)

one shall be nominated by the Minister for the time being responsible for Finance;

(b)

one shall be nominated by the Minister for the time being responsible for Technical and Business Training;

(c)

one shall be nominated by the Federation of Kenya Employers;

(d)

one shall be the Director of Personnel Management or a person nominated by him;

(e)

one shall be nominated by the Attorney-General;

(f)

two shall be nominated by the Council;

(g)

two shall be nominated by the Council of the Institute of Certified Public Secretaries of Kenya; and

(h)

two shall be nominated by the Board, being persons who have an interest in and have made a significant contribution in the development of education in accountancy, secretarial and related areas.

(2)

In nominating a person for appointment pursuant to subsection (1)(a), the Minister shall have regard to the need to appoint a person who has the responsibility of guiding and advising on the policy relating to accountancy and accountability in Government.

(3)

In nominating a person for appointment under subsection (1)(b), the Minister concerned shall have regard to the need to appoint a person who has responsibility for overseeing and is in charge of technical and business training matters in the Government.

(4)

The person nominated under subsection (1)(c) shall be a person engaged in industry or commerce.

16.
Secretary to the Examinations Board
(1)

There shall be a Secretary to the Examinations Board who shall be appointed by the Minister on the recommendation of the Board.

(2)

The Secretary to the Examinations Board shall hold and vacate the office of Secretary in accordance, with the terms specified in the instrument of his appointment to that office.

(3)

The Secretary to the Examinations Board may attend meetings of the Examinations Board and may, with the consent of the person presiding at a meeting, take part in the deliberations on any matter arising at the meeting, but shall not be entitled to vote on any such matter.

(4)

In addition to the functions which he is required to exercise and perform under this Act, the Secretary to the Examinations Board shall exercise and perform such other functions as the Examinations Board may, from time to time, determine.

PART III – PRACTISING CERTIFICATES AND REGISTRATION OF ACCOUNTANTS
19.
Practising as an accountant
(1)

Subject to this section, a person practises as an accountant for the purposes of this Act if, in consideration of remuneration or other benefits received or to be received, and whether by himself or in partnership with any other person, such person—

(a)

engages in the practice of accountancy or holds himself out to the public as a person entitled to do so;

(b)

offers to perform or performs services involving the auditing or verification of financial transactions, books, accounts or records;

(c)

offers to perform or performs services involving the verification or certification of financial accounts and related statements; or

(d)

engages in any practice, or performs or offers to perform any services, which may be prescribed.

(2)

A salaried employee of the Government, a local authority or of any other person does not practise as an accountant by reason only of doing, in his capacity as such employee, any of the acts referred to in subsection (1).

(3)

An advocate, a Certified Public Secretary or a person authorised to do so by or under any written law, does not practise as an accountant by reason only of carrying on the work of a tax consultant or a tax advisor.

20.
Application for a practising certificate
(1)

A person wishing to obtain a practising certificate shall apply to the Registration Committee.

(2)

An application for a practising certificate shall be in the prescribed form and shall be accompanied by the prescribed fee.

22.
Issue of annual licence
(1)

Where the holder of a practising certificate intends to practise as a firm, whether as a sole practitioner or in a partnership, he shall apply to the Registration Committee for an annual licence in the prescribed form, furnishing the Registration Committee with such details of the firm as it may require.

(2)

Where an application is made by a person under subsection (1), the Registration Committee shall issue him with an annual licence if it is satisfied that the person—

(a)

holds a practising certificate; and

(b)

meets such other requirements as may be prescribed,

and, if not so satisfied, shall refuse the application.

(3)

An annual licence issued under this Act shall be valid from the date of issue to the thirty-first December of the year of issue and shall be renewed at the end thereof.

23.
Practising certificate, annual licence to remain the property of Institute

A practising certificate or an annual licence issued to any person shall remain the property of the Institute.

25.
Holders of authority to practise
(1)

Notwithstanding sections 21(1)(b) and 24(3), the Registration Committee may on application and payment of the prescribed fees, register as an accountant any person who, prior to the commencement of this Act, is the holder of a valid authority to practise issued in accordance with the provisions of the Accountants Act (Cap. 531) (now repealed).

(2)

Applications under this section shall be received by the Committee within a period of eighteen months after the commencement of the Act.

26.
Qualifications for registration
(1)

Subject to this section, a person is qualified to be registered if the person—

(a)

has been awarded by the Examinations Board a certificate designated the Final Accountancy Certificate; or

(b)

holds a qualification approved under subsection (2) by the Council.

(2)

The Council may in consultation with the Examinations Board and with the approval of the Minister, from time to time, by notice in the Gazette, approve qualifications which it considers sufficient to allow a person to be registered, and may, in like manner, withdraw any such approval.

(3)

Notwithstanding subsection (1) or (2), the Council may require a person making an application for registration to satisfy the Registration Committee, in such manner as it may direct, that the person has—

(a)

adequate knowledge of local law and practice;

(b)

adequate experience in accounting; and

(c)

acceptable professional conduct and general character which, in the opinion of the Committee, make such person a fit and proper person to be registered, and unless the person so satisfies the Registration Committee, he shall not be treated as being qualified to be registered.

27.
Disqualification from registration
(1)

Subject to this section, a person is disqualified from being registered—

(a)

if such person is convicted by a court of competent jurisdiction in Kenya or elsewhere of an offence involving fraud or dishonesty;

(b)

if such person is an undischarged bankrupt;

(c)

if such person is of unsound mind and has been certified to be so by a medical practitioner; or

(d)

during any period when the Disciplinary Committee has determined under section 33(1)(i) that such person shall not be registered, or during any such period as varied by the High Court under section 34(2) of this Act.

(2)

A person shall not be treated as disqualified under subsection (1)(a) of this section if the Registration Committee, having regard to—

(a)

the period which has elapsed since the conviction concerned; or

(b)

the circumstances of the offence,

determines that it would be unreasonable to so treat him.

(3)

A person shall not be treated as disqualified under subsection (1)(b) of this section if the Registration Committee is satisfied that the bankruptcy of the person concerned arose as a result of unavoidable losses or misfortunes.

(4)

A person shall not be treated as being disqualified under subsection (1)(d) of this section if the High Court allows an appeal under section 34 of this Act.

28.
Register
(1)

The Secretary to the Registration Committee shall cause to be kept a register in which shall be recorded—

(a)

the name of any person whose application under section 20 of this Act is approved;

(b)

the fact that a practising certificate is issued to any person or that any such certificate has ceased to be in force under this Act;

(c)

particulars of the cancellation of the registration of any person;

(d)

the fact that the registration of any person is restored under this Act;

(e)

details of firms engaged in the public practice of accountancy, including their proprietors; and

(f)

such other matters as the Council may determine.

(2)

The Secretary to the Registration Committee may cause to be made such alterations in the register as are necessary to ensure that the matters recorded therein are accurate.

(3)

The register may, at all reasonable hours, be inspected, and copies of all or any part of any entry in the register taken—

(a)

without payment, by—

(i) any member of the police force or any public servant, acting in the course of his duty; or
(ii) any person authorized by the Secretary to the Council; or
(b)

on payment of such fee as may be prescribed, by any other person.

(4)

The register shall be received in proceedings before any court or tribunal as evidence of the matters recorded therein which are required by or under this Act to be so recorded.

(5)

A document purporting to be certified by the Secretary to the Council—

(a)

to be a true copy of an entry in the register;

(b)

stating that a person is not, or was not on a date specified in the document, registered; or

(c)

stating that a person is not, or was not on a date specified in the document, the holder of a practising certificate,

shall be received in proceedings before a court or tribunal as prima facie evidence of any such matters contained in the entry or of that fact, as the case may be.

(6)

Proceedings on an inquiry under this Act before the Disciplinary Committee shall be deemed to be proceedings before a tribunal for the purposes of this section.

29.
Cancellation of registration
(1)

Subject to this section, the Registration Committee shall cancel the registration of a member—

(a)

if determination that the registration of the member be cancelled is made under section 33(1)(i) of this Act;

(b)

if any circumstance arises which, if the member were then a person applying for registration, would disqualify him under section 27 from being registered; or

(c)

if it is appropriate under subsection (4) of this section to do so.

(2)

The Registration Committee shall not cancel the registration of a member under subsection (1)(b) unless it has afforded to the member an opportunity to show cause why his registration should not be cancelled.

(3)

Subsections (2) and (3) of section 27 shall apply in relation to the cancellation of the registration of a member of the Institute under subsection (1) (b) of this section as they apply for the purpose of determining whether or not a person is disqualified from being registered.

(4)

The Registration Committee may cancel the registration of a member of the Institute who fails to comply with the requirements of section 5.

(5)

When the registration of a member of the Institute is cancelled under subsection (1) (a), the Registration Committee shall restore the registration if, on an appeal made under section 34 the High Court allows the appeal.

(6)

The Registration Committee shall upon request restore the registration of a person whose registration is cancelled under subsection (1)(c).

(7)

The registration of a member shall be restored by recording in the register particulars of the restoration.

(8)

The registration of a member shall be cancelled by recording in the register particulars of the cancellation.

(9)

A person aggrieved by a determination of the Registration Committee under section 21(1), section 22(2) and section 24(3) may appeal to an arbitrator against such determination within twenty-one days of being notified of the determination.

(10)

A person dissatisfied by a decision under subsection (9) may appeal to the High Court, which may affirm the determination of the registration Committee or allow the appeal.

PART IV – DISCIPLINARY PROVISIONS
31.
Disciplinary Committee
(1)

There shall be a committee of the Council to be known as the Disciplinary Committee.

(2)

The Disciplinary Committee shall consist of seven members who shall be appointed in accordance with subsection (3).

(3)

The members of the Disciplinary Committee shall be appointed by the Minister from amongst persons nominated in the following manner—

(a)

four nominated by the Council from amongst the members of the Institute, of whom one shall be designated as the chairman;

(b)

one nominated by the Council from another profession other than accountancy;

(c)

one nominated by the Attorney-General;

(d)

one nominated by an organization that promotes corporate governance.

(4)

In making appointments under this section the Minister shall have regard to the knowledge and interest of the persons so appointed in matters pertaining to accountancy.

(5)

The quorum of a meeting of the Disciplinary Committee shall be four.

(6)

Subject to subsection (7), a member of the Disciplinary Committee shall hold office for three years and shall be eligible for re-appointment for one further term.

(7)

Where any member of the Disciplinary Committee resigns his office or is for any reason unable to perform the functions of his office, the Council shall with the consent of the Minister, require the respective nominating body specified in subsection (3) to nominate a replacement for such member, for appointment in accordance with that subsection.

(8)

The Council shall provide the Disciplinary Committee with such facilities and resources as are necessary to enable it to competently discharge its functions.

(9)

The Disciplinary Committee may, subject to the provisions of this Act, regulate its own procedure.

32.
Inquiry by the Disciplinary Committee
(1)

Where the Council has reason to believe that a member of the Institute may have been guilty of professional misconduct it shall refer the matter to the Disciplinary Committee which shall inquire into the matter.

(2)

The provisions of the Fifth Schedule shall have effect with respect to an inquiry by the Disciplinary Committee pursuant to subsection (1).

33.
Recommendation after inquiry
(1)

On the completion of an inquiry under section 32 into the alleged professional misconduct of a member of the Institute, the Disciplinary Committee shall submit to the Council a report of the inquiry which shall include one or more of the following recommendations, namely—

(a)

that no further action be taken against the member;

(b)

that the member be reprimanded;

(c)

that the member be reprimanded with publication of the reprimand in the Kenya Gazette or in any other suitable media which may include the newspapers, electronic media and the internet;

(d)

that the member pays such costs to the Institute, not exceeding one hundred thousand shillings, as may be determined;

(e)

that the member undertakes training at his own cost, of such nature and duration and at such institutions as may be determined;

(f)

that the member pays to the Institute a fine not exceeding fifty thousand shillings;

(g)

that the member discharges his professional obligations under any contractual arrangement subject of the alleged misconduct;

(h)

that any practising certificate held by the member be suspended; or

(i)

that the registration of the member be cancelled and that he be not registered for such period (including life) as may be specified.

(2)

Where the Disciplinary Committee, in a report makes a recommendation under subsection (1), the Council shall inform the member concerned of the action to be taken against him and effect the recommendation of the Disciplinary Committee.

(3)

A member aggrieved by a determination of the Disciplinary Committee under subsection (1) may make an appeal to the Council within sixty days of the communication to him of such determination, providing the grounds upon which the appeal is lodged.

(4)

The Council may upon receipt of an appeal under subsection (3) direct the Disciplinary Committee to re-open the inquiry and shall in such direction specify the aspects of the matter it requires the Disciplinary Committee to reconsider.

(5)

The Disciplinary Committee shall comply with the direction of the Council under subsection (4) and shall, after concluding the inquiry, submit a report to the Council in accordance with subsection (1).

(6)

Any recommendation of the Disciplinary Committee under this section shall not be effected until after the expiry of the period prescribed under subsection (3) for appeals and the subsequent conclusion of the appeal proceedings thereof.

34.
Appeals
(1)

A person aggrieved by a determination of the Disciplinary Committee under section 33(2) may appeal to the High Court against such determination within sixty days of being notified of the determination.

(2)

On an appeal the High Court may affirm, with or without variation, of the period for which the person concerned is not to be registered, or the period for which his practising certificate is suspended, confirm the determination of the Disciplinary Committee or allow the appeal.

(3)

A determination under section 33 of this Act shall have effect notwithstanding that an appeal is made against the determination, but in the event that the High Court allows the appeal—

(a)

section 28 of this Act shall have effect in relation to the cancellation of the registration of the member; and

(b)

the suspension of the practising certificate of the member of the Institute shall cease to have effect.

35.
Rules
(1)

The Chief Justice may make rules governing appeals under section 34 and providing for the fees to be paid, the scale of costs of any appeal and the procedure to be followed therein.

(2)

Until rules are made under subsection (1) of this section, and subject to any such rules, the provisions of the Civil Procedure Code (Cap. 21) shall apply as if the determination appealed against was a decree of a subordinate court exercising original jurisdiction.

36.
Part to apply to previous holder of an authority to practise

For the avoidance of doubt it is declared that the provisions of this Part shall apply to any person registered as an accountant under the provisions of section 25 of this Act for actions undertaken by such person while practising under a written authority to practise granted prior to the commencement of this Act.

PART V – MISCELLANEOUS
37.
Staff of the Institute and the Examinations Board
(1)

The Institute and the Examinations Board may each engage and employ such persons as are necessary for the discharge of their respective functions under this Act, on such terms and conditions as may be specified in the instruments of appointment.

(2)

The terms and conditions of employment of staff employed under this section shall be as may be determined by the Institute and the Examinations Board respectively.

(3)

For the purposes of subsection (2)“terms and conditions” includes conditions with respect to the duration of employment or with respect to dismissal from employment.

38.
Protection from liability

No liability shall attach to the Institute, or the Examinations Board or to any of their respective members, employees or agents for any loss or damage sustained by any person as a result of any act or omission done or made in good faith and without negligence in the performance or exercise or the intended performance or exercise of any duty or power imposed or conferred by or under this Act.

39.
Moneys payable to the Institute and the Examination Board
(1)

There shall be payable to the Institute and the Examinations Board such moneys as are appropriated by Parliament, and such grants as may be recommended by the Minister and approved by Parliament for their respective purposes.

(2)

The Minister may give directions as to the amounts in which, and the times at which, moneys referred to in subsection (1), are to be paid to the Institute or the Examinations Board.

40.
Accounts and audit
(1)

The Institute and the Examinations Board shall keep proper accounts and records in relation to the accounts and shall each prepare in respect of each accounting year a statement of accounts.

(2)

The statement of accounts of the Institute and the Examinations Board shall, subject to the overriding provisions of the Public Audit Act, 2003 (No. 12 of 2003), and mutatis mutandis, be audited by accountants appointed by the Institute and the Examinations Board, as the case may be.

(3)

Within six months after the end of the financial year or other period to which the accounts examined and audited under subsection (2) relate, the Institute and the Examinations Board shall send to the Minister a copy of the statement together with a copy of any report made by the auditor concerned on that statement or on any such accounts.

42.
Examinations offences

Any person who—

(a)

gains access to examinations materials and knowingly reveals the contents, whether orally, in writing or through any other form, to an unauthorised party, whether a candidate or not;

(b)

wilfully and maliciously damages examinations materials;

(c)

while not registered to take a particular examination, with intent to impersonate presents or attempts to present himself to take the part of an enrolled candidate;

(d)

presents a forged certificate to a prospective employer or to an institution of learning with intent to gain employment or admission; or

(e)

introduces unauthorised materials into the examinations room, whether in writing or in any other form, whether a candidate or not,

commits an offence and is liable on conviction to imprisonment for a term not exceeding three years, or to a fine not exceeding one hundred thousand shillings, or to both.

43.
Conduct of prosecutions

The Attorney-General may, pursuant to the provisions of the Criminal Procedure Code (Cap. 75), appoint public prosecutors for purposes of this Act.

44.
Vacancy in membership

The Council and the Examinations Board may exercise and perform their functions notwithstanding any vacancy among the members and the validity of any proceedings of the Council or the Examinations Board shall not be affected by any such vacancy or any defect in the appointment of a member.

45.
Appointment of interim managers
(1)

Where a member in private practice suffers incapacitation, the Council may appoint a person, in this section referred to as an interim manager, to conduct the professional affairs of that member for a duration not exceeding two years in accordance with the provisions of the Sixth Schedule.

(2)

The interim manager appointed under subsection (1) shall be the holder of a practising certificate issued in accordance with the provisions of this Act.

(3)

The provisions of the Sixth Schedule shall have effect with respect to an interim manager appointed under this section.

46.
Regulations

The Minister may make regulations prescribing anything which is required to be prescribed under the provisions of this Act.

47.
References to accountant

Where, in any written law, any reference is made (in whatsoever terms), or is implied as referring to an accountant, such reference or implied reference shall be deemed subject to the provisions of the Public Audit Act, 2003 (No. 12 of 2003), and mutatis mutandis, refer to the holder of a practising certificate, or to the holders of practising certificates, issued pursuant to section 21 of the Act.

PART VI – REPEALS AND AMENDMENTS
48.
Amendment of Cap. 486

Section 161 of the Companies Act (Cap. 486) is amended by repealing subsection (1) and substituting therefor the following new subsection—

(1)

A person or firm shall not be qualified for appointment as auditor of a company unless he or, in the case of a firm, every partner in the firm, is the holder of a practising certificate issued pursuant to section 21 of the Accountants Act, 2008 (No. 15 of 2008).

49.
Amendment of Cap. 489
(1)

The Building Societies Act (Cap. 489) is amended by repealing section 15 and replacing it with the following new section—

15. Audit

Every building society shall have one or more auditors, each of whom shall be the holder of a practising certificate issued pursuant to section 21 of the Accountants Act, 2008 (No. 15 of 2008).

50.
Amendment of No. 14 of 2007

The Labour Relations Act, 2007 (No. 14 of 2007), is amended in section 42 by repealing subsection (5) and substituting therefor the following new subsection—

(5)

The account rendered under this section shall be verified by statutory declaration, and shall be audited by the holder of a practising certificate issued pursuant to section 21 of the Accountants Act, 2008 (No. 15 of 2008).

51.
Repeal of Cap. 531 and savings
(1)

The Accountants Act (Cap. 531) is repealed.

(2)

Notwithstanding the repeal of the Accountants Act (Cap. 531) the transitional provisions set out in the Seventh Schedule shall have effect on the repeal of the Accountants Act (Cap. 531).

FIRST SCHEDULE [Section 3(4), Act No. 57 of 2012, s. 58.]
SECOND SCHEDULE [Sections 10 (2), 11.]

THE COUNCIL

Members of the Council
1.

(1) Each of the six members of the Council (one of whom shall be the Vice-Chairman) referred to in section 11(f) of this Act shall be elected at an annual general meeting of the Institute.

(2)

Subject to paragraph 2 of this Schedule, a member of the Council—

(a)

elected pursuant to sub-paragraph (1);

(b)

appointed pursuant to section 11(b), (c), (d) and (e) of this Act; or

(c)

co-opted pursuant to sub-paragraph (4),

shall hold office for the prescribed period, unless he earlier ceases to hold office.

(3)

A member of the Institute shall be disqualified from contesting any position on the Council if within the preceding three years, such member—

(a)

has been found guilty of an act of professional misconduct under section 31 of the Act, which in the opinion of the Council renders him unfit to hold the office;

(b)

has been convicted of an offence and sentenced to imprisonment for a term of six months or more without the option of a fine;

(c)

has been convicted of an offence involving corruption, dishonesty or abuse of office; or

(d)

has been adjudged bankrupt or has entered into a composition or scheme of arrangement with his creditors.

(4)

Subject to sub-paragraph (5), where a member of the Council (including a member co-opted pursuant to this sub-paragraph) ceases to hold office before the expiration of the prescribed period or otherwise than under the provisions of paragraph 2 of this Schedule (where applicable), the Council may co-opt a person to hold that office.

(5)

Sub-paragraph (4) does not apply to the members of the Council appointed pursuant to section 11(b), (c), (d) and (e) of this Act.

(6)

In this sub-paragraph, the “prescribed period” means—

(a)

in relation to a member referred to in sub-paragraph (2)(a), the period beginning with his election and ending at the commencement of the day on which the third annual general meeting after his election is to be held;

(b)

in relation to a member referred to in sub-paragraph (2)(b), the period of three years next following his appointment; or

(c)

in relation to a member referred to in sub-paragraph (2)(c), the period beginning with his being co-opted and ending at the commencement of the day on which the first annual general meeting after his being co-opted is to be held.

2.

Of the six members of the Council (including the Vice-Chairman) first elected by the Institute after the commencement of this Act—

(a)

two (identified by agreement of the members of the Council or by lot) shall cease to hold office at the commencement of the day on which the second annual general meeting of the Institute is to be held, save in the case of any such who earlier ceases to hold office;

(b)

two (so identified) shall cease to hold office at the commencement of the day on which the third annual general meeting of the Institute is to be held, save in the case of any such member who earlier ceases to hold office; and

(c)

the remaining two members shall cease to hold office at the commencement of the day on which the fourth annual general meeting of the Institute is to be held, save in the case of any such member who earlier ceases to hold office.

3.

Notwithstanding paragraph 2, the office of a member of the Council shall become vacant if such member—

(a)

resigns the office by writing under his hand delivered—

(i) in the case of the members appointed pursuant to section 11(b), (c), (d) and (e) to the Minister; or
(ii) in the case of any other member, to the Council;
(b)

has the appointment revoked by the Minister in the case of the members appointed pursuant to section 11(b), (c), (d) and (e);

(c)

ceases to hold the office in the case of the members appointed pursuant to section 11(b), (c), (d) and (e);

(d)

is adjudged bankrupt or enters into a composition or scheme of arrangement with his creditors; or

(e)

is absent without the permission of the Council from three or more consecutive ordinary meetings of the Council; or

(f)

is convicted of an offence and sentenced to imprisonment for a term of six months or more without the option of a fine; or

(g)

is found guilty of an act of professional misconduct under section 31 of the Act, which in the opinion of the Council renders him unsuitable to continue to hold office; or

(h)

becomes for any reason, including infirmity of body or mind, incompetent or incapable of performing the functions of his office.

4.

(1) Subject to paragraph 1(4) of this Schedule, where a member of the Council ceases to hold office, another member shall be elected to fill the vacancy at the annual general meeting of the Institute next following, or shall be appointed as provided under section 11(b), (c), (d) or (e) of this Act, as the case may be.

(2)

A member of the Council who ceases to hold office other than under paragraph 3(b), (c), (d), (e) or (f) is eligible for re-election or re-appointment.

Vice-Chairman of the Council
5.

(1) There shall be a Vice-Chairman of the Council who shall be elected by the Council from amongst the members of the Council elected under section 11(f) of this Act.

(2)

The Vice-Chairman shall hold office for the period of one year immediately following his election to the office or, if he ceases to hold office as a member of the Council before then, until he so ceases to hold office.

(3)

Subject to paragraph 2 of the First Schedule of this Act, the Vice-Chairman may exercise and perform the functions of the Chairman if the Chairman is unable to exercise and perform those functions.

Proceedings
6.

The quorum at meetings, of the Council and the arrangements relating to meetings of the Council shall be such as the Council may determine.

7.

The person presiding at a meeting of the Council has a deliberative vote, and, in the event of an equality of votes, also has a casting vote.

8.

Minutes of the proceedings of the Council shall be kept in such manner as the Council directs, and, on the written request of the Minister, shall be made available to him or any person nominated by him.

THIRD SCHEDULE [Section 13(9).]

THE REGISTRATION AND QUALITY ASSURANCE COMMITTEE

1.

(1) A member of the Registration Committee shall hold office for a period of three years unless he earlier ceases to hold office.

(2)

A member of the Registration Committee may resign the office by writing under his hand to the Council which shall seek the nomination of a replacement for appointment by the Minister.

(3)

A member of the Registration Committee who ceases to hold office at the end of the prescribed term is eligible for re-appointment.

2.

(1) The procedure to be followed on a quality assurance review shall subject to this Schedule, be at the discretion of the Registration Committee.

(2)

The Registration Committee shall notify the member of an impending quality assurance review at least twenty one days prior to commencement of the review.

3.

(1) Where the results of a quality assurance review are considered unsatisfactory the Registration Committee may require the member or members concerned to undertake necessary corrective actions to comply with professional standards and may prescribe requirements to be observed in this respect.

(2)

The requirements of the Registration Committee shall be implemented by the member or members investigated within such time as may be determined.

4.

The Registration Committee shall provide the Council with a report on all the quality assurance reviews the Committee undertakes and where necessary or appropriate, the Council shall take such action as may be recommended therein.

5.

(1) The Registration Committee shall not without the consent of the member or members under review, disclose to any person other than the Council, any information received in the course of an investigation, unless such disclosure is required by a law for the time being in force in Kenya.

(2)

Any member of the Registration Committee or quality assurance review team who discloses any information acquired in the course of a quality assurance review contrary to the provisions of this Act or applies such information to gain advantage whether financial or otherwise commits an offence and shall be liable to a fine not exceeding fifty thousand shillings on conviction.

6.

The quorum for meetings of the Registration Committee shall be four.

7.

The decision of the Registration Committee shall be that of the majority of the members present and voting:

Provided that in the event of equality of votes, the Chairman shall have a casting vote.

8.

The validity of the proceedings of the Registration Committee shall not be invalidated by any vacancy in its membership.

9.

A record of the proceedings of the Registration Committee shall be kept in such manner as the Committee directs, and may on a written request be availed to the Council or a party authorised by the Council or the High Court to receive them.

FOURTH SCHEDULE [Section 14(4).]

THE EXAMINATIONS BOARD

Members of the Examinations Board
1.

(1) A member of the Examinations Board shall hold office for the period of three years next following his appointment and shall be eligible for re-appointment, unless he earlier ceases to hold office.

(2)

The office of a member of the examinations Board shall become vacant if such member—

(a)

resigns the office by writing under his hand delivered to the Minister;

(b)

has the appointment revoked by the Minister or ceases to hold the office.

(3)

The Minister shall after receipt of the communication under sub-paragraph (2), appoint a replacement in accordance with section 15(1) of the Act.

2.

(1) The Minister shall appoint from amongst the members of the Examinations Board a Chairman and Vice Chairman of the Board.

(2)

The Chairman and the Vice-Chairman of the Examinations Board shall hold office until they cease to hold office as members of the Examinations Board or until they resign the office under sub-paragraph (3) of this paragraph.

(3)

The Chairman or the Vice-Chairman of the Examinations Board may resign the office, by writing under his hand addressed to the Minister.

(4)

The Vice-Chairman may exercise any of the functions of the Chairman if the Chairman is unable to exercise and perform those functions.

3.

(1) The quorum at meetings of the Examinations Board and the arrangements relating to meetings shall be such as the Examinations Board may determine.

(2)

The person presiding at a meeting of the Examinations Board has a deliberative vote, and, in the event of an equality of votes, also has a casting vote.

(3)

Minutes of the proceedings of the Examinations Board shall be kept in such manner as the Board directs, and, on the written request of the Minister shall be made available to him or any person nominated by him.

FIFTH SCHEDULE [Section 32(2), Act No. 10 of 2018, s. 83.]
SIXTH SCHEDULE [Section 45(3).]

APPOINTMENT OF INTERIM MANAGER

1.

A member in practice shall be deemed to be incapacitated when an event occurs that makes it impossible for the member to continue running the practice in accordance with the provisions of this Act or a circumstance arises which makes it not possible for the member to continue discharging the duties expected of him as a professional accountant.

2.

Every member who holds a practising certificate shall at such intervals as the Council may direct nominate a suitably qualified member in good standing to be known as the interim manager, to manage and control the affairs of his practice in the event of incapacity or inability of the member to run the affairs of the practice.

3.

Where a member in practice fails to nominate an interim manager as required under this Schedule, the Council may exercise its powers as conferred in section 45 of the Act.

4.

(1) For the purpose of nominating the interim manager, a member in practice or the Council as the case may be shall specify in the instrument of nomination—

(a)

the general nature of obligations to be assumed by the interim manager, and specifically the role of the interim manager in the disposal of the practice and his relationship with any person who may be appointed as estate executor or administrator;

(b)

the powers of the interim manager covering matters such as staff deployment or other operations of the practice;

(c)

the remuneration of the interim manager;

(d)

the period of service of the interim manager;

(e)

the powers conferred on the interim manager to sign reports, correspondence, agreements or other documentation in the name of the practice;

(f)

the premises from which the operations will continue to take place if different from the practice’s registered office.

5.

(1) An interim manager shall take appropriate steps to safeguard the welfare of clients of the practice at the time of assuming office and should desist from conduct that seeks to gain from his appointment, otherwise than in the form of remuneration agreed.

(2)

An interim manager shall be responsible for their own actions. The interim manager shall exercise due care and skill in the discharge of his duties and shall provide adequate professional indemnity insurance during the term of his engagement and meet other conditions as may be prescribed.

(3)

Where appropriate, the interim manager may have his name included in the letter head of the practice but may not alter the name of the practice unless this is expressly provided for in the nomination agreement.

(4)

Where the nominating member has at the time of nominating an interim manager authorised the sale of his practice, the interim manager shall enter into negotiations with interested parties and shall ensure that the instructions of the nominating member are executed to his best interest.

(5)

Full details of every agreement involving the appointment of an interim manager shall be submitted to the Council within twenty one days of its commencement. An interim manager shall within seven days of assuming office notify the Council of that fact.

(6)

Where the Council appoints an interim manager, full details of the appointment shall be recorded by the Council and the acceptance thereof documented.

(7)

The interim manager shall at intervals of six months, submit a report to the person that appointed him. Where the appointing member is incapacitated or deceased, the interim manager shall submit such report to the Council. The report shall contain all such details as may be prescribed by the Council and any other matters covered within the nomination agreement.

SEVENTH SCHEDULE [Section 52.]

TRANSITIONAL PROVISIONS

1.

The Institute and the Examinations Board established under the Accountants Act (Cap. 531), (now repealed) having effect before the commencement of this Act, shall be deemed to continue operations and continue their existence as the Institute or the Examinations Board as the case may be, under the provisions of this Act.

2.

The Chairman, Vice-Chairman and members of the Council of the Institute who are in office immediately before the commencement of this Act shall be deemed to have been elected within the meaning of section 11 of this Act and the validity of the proceedings of the Council shall not be affected by any irregularities in the appointment of the members of the Council.

3.

The secretary to the Council who is in office immediately before the commencement of this Act shall be deemed to have been appointed within the meaning of section 12 of this Act.

4.

The Chairman, Vice-Chairman and members of the Examinations Board who are in office immediately before the commencement of this Act shall be deemed to have been appointed within the meaning of section 15 of this Act and the validity of the proceedings of the Examinations Board shall not be affected by any irregularities in the appointment of the members of the Examinations Board.

5.

The Secretary to the Examinations Board who is in office immediately before the commencement of this Act shall be deemed to have been appointed within the meaning of section 16 of this Act.

6.

Any registration certificate or practising certificate or written authority to practise issued and in force under the Accountants Act (Cap. 531) (now repealed) shall at the commencement of this Act be deemed, as the case may be, to have been issued in accordance with the provisions of this Act:

Provided that the holder of a written authority to practise shall apply to the Registration Committee for registration within a period of eighteen months after the commencement of this Act.

7.

Any certificate of qualification issued by the Examinations Board at the commencement of this Act shall be deemed to have been issued under the provisions of this Act.

8.

The Disciplinary Committee established under the Accountants Act (Cap. 531) (now repealed) shall be deemed to have been established within the provisions of this Act, and any proceedings or matters pending before the Disciplinary Committee at the commencement of this Act shall proceed without risk as to their validity in accordance with the provisions of this Act notwithstanding any irregularities in the appointment of the members of the Disciplinary Committee.

9.

All persons who prior to the commencement of this Act were in the employment of the Registration of Accountants Board, shall upon commencement be deemed to be employed by the Institute on such terms and conditions not being to their disadvantage, as the Institute may determine.

10.

The Service of the employees of the Institute and the Examinations Board shall be deemed to be continuous service for the purposes of the payment of all employment benefits.

11.

Anything done by the Institute or the Examinations Board established under the Accountants Act (Cap. 531), (now repealed) having effect before the commencement of this Act, shall be deemed to have been done by the Institute or the Examinations Board as the case may be, under the provisions of this Act.