Cap. 281 Art. 10Partnerships of accountants or of auditors.

(1) Where two or more persons intend to practise jointly as accountants, they may form an accountancy firm having as one of its main objects the practice of accountancy:

Provided that for an accountancy firm to practise as an audit firm it shall be required to have as one of its main objects the practice of auditing and shall fulfil such other conditions as may be prescribed in directives issued by the Board under this Act from time to time: Provided further that a firm may provide other services

(2) Where an accountancy firm is authorised to act as an audit firm it may indicate such fact in or together with the firm’s name as the case may be.

(3) No person may be a principal in an accountancy firm which is not also an audit firm unless such person:

(a) holds a warrant issued under article 4(1); or

(b) is a person of good repute and is appropriately qualified either by way of academic or professional qualifications or experience.

(4) In an accountancy firm which is not also an audit firm the persons listed in subarticle (3)(a) shall:

(a) hold more than fifty per centum of the voting rights in the firm; and

(b) constitute more than sixty per centum of the firm’s administrative or management body: Provided that in the case of an accountancy firm which is owned, managed and controlled by two individuals, only one of the individuals sitting on the administrative or management body of the firm shall be required to satisfy the conditions laid down in subarticle (3)(a).

(5) No person may be a principal in an audit firm unless such person:

(a) holds a practising certificate to practise in the field of auditing; or

(b) is an audit firm of good repute approved in a Member State; or

(c) is a person of good repute and is appropriately qualified either by way of academic or professional qualifications or experience.

(6) An audit firm shall be of good repute and shall satisfy the following conditions:

(a) the individuals who carry out the audit on behalf of the audit firm must hold a practising certificate in the field of auditing;

(b) the majority of the voting rights in the audit firm must be held by an audit firm or audit firms approved in any Member State or by individuals holding a practising certificate in the field of auditing; and

(c) sixty per centum of the administrative or management body of the audit firm must be made up of an audit firm or audit firms approved in any Member State or by individuals holding a practising certificate in the field of auditing: this paragraph (c).

(7) A firm shall, when duly formed according to law, be registered with the Board, and upon such registration the principals, shall, for so long as it is so registered, be authorised by the Board to act, in the name and on behalf of the firm and where applicable, to bring to the notice of the public the fact that it may practise in any field of the profession of accountant for which a certificate may be required under article 4(2); and in the case of an accountancy firm it shall be entitled accordingly to use the designation of certified public accountants and the abbreviation "CPAs".

(8) When an audit firm carries out an audit, the audit report shall be signed at least by an individual auditor carrying out the audit on behalf of the audit firm.

(9) Every firm registered under this article shall give to the Board such information as the Board may reasonably require or as may be prescribed in directives issued by the Board under this Act, and shall give notice to the Board of any relevant change in any information previously given to it within fifteen days after the date on which the change occurs.

(10) Notwithstanding any other provisions of this Act or of any other enactment and notwithstanding any agreement to the contrary, the principals shall be responsible for the maintenance of the required professional standards and conduct including any applicable Code of Ethics, and generally responsible for the fulfilment of their obligations under this Act or any other applicable law.

(11) Any person who makes use of the designation "certified public accountants" or its abbreviation "CPAs" and, or, bringing to the notice of the public the holding of any particular certificate in relation to a firm which is not registered under this article or in any other manner knowingly makes use of a name falsely implying the existence of such a firm, or that such a firm is registered, or may otherwise lawfully function, under this article, or does any other act calculated to lead to the belief that any of the facts aforesaid exists when in fact it does not, shall be guilty of an offence and shall be liable on conviction, for each offence, in respect of a first offence to a fine (multa) not exceeding two thousand and five hundred euro (€2,500.00), and in respect of a second or subsequent offence to a fine (multa ) not exceeding twelve thousand euro (€12,000.00) or to imprisonment to a term not exceeding three months or to both such imprisonment and fine, and in the case of a continuing offence to an additional fine (multa) not exceeding two hundred and fifty euro (€250.00) for each day during which the offence continues.

(12) The provisions of article 3(5) shall, mutatis mutandis, apply to the registration of a firm under this article as they apply to the issue of a warrant under this Act. with article 3(1) and (2) and regulation 4(1) and (2) and regulation 7 of the Accountancy Profession Regulations.

(2) Where an audit firm which qualifies under sub-article (1) wishes to carry out statutory audits, it shall register with the Board in accordance with article 7(4) and (15) and regulation 6 of the Accountancy Profession Regulations.

(3) The Board shall register the audit firm if it is satisfied that the audit firm is registered with the competent authority in the home Member State. Where the Board intends to rely on a certificate attesting to the registration of the audit firm in the home Member State, the Board may require that the certificate issued by the competent authority in the home Member State be not more than three months old. The Board shall inform the competent authority in the home Member State of the registration of the audit firm.