Who is disqualified from being the auditor of my company?

Statutory disqualifications (s.393(2)) A person cannot be appointed auditor if they are:

• An officer or employee of the company.
• A partner or employee of an officer or employee of the company.
• Someone who is disqualified in that way for a parent or a subsidiary undertaking of the company, or for a subsidiary of that parent.

An auditor is not counted as an "officer or employee" just because they are auditor.

If it happens after appointment The auditor immediately ceases to hold office and must notify the company in writing within 14 days (s.418). Failing to do so is an offence, with a defence for someone who neither knew nor had reason to believe they had become disqualified.

Ethics rules (HKICPA Code of Ethics) The Code, which AFRC oversees, adds independence rules beyond the statute. For audits of public interest entities (listed and similar companies), a person who has been engagement partner for seven cumulative years must then stay off the audit for five consecutive years (three for the engagement quality reviewer, two for other key audit partners; Section 540). For other companies the firm must judge long-association threats and consider safeguards such as rotating staff off the team. The Code also covers self-review threats and inducements.

For owners Do not appoint a relative who is also an officer or employee, and do not let the audit firm's staff take a role in the company.