Section 24 of The Banking Act CAP 488: Appointment of auditors

(1) Subject to subsection (7), every institution shall appoint annually an auditor (within the meaning of section 3(1) of the Companies Act (Cap. 486)) and approved by the Central Bank.
(1A) An auditor appointed under subsection (1) shall audit and report on the annual balance sheet and profit and loss account required to be submitted to the Central Bank in accordance with section 23(1).
(2) If an institution fails to appoint an approved auditor under subsection (1), or to fill any vacancy for an auditor which may arise, the Central Bank may appoint an auditor and fix the remuneration to be paid by the institution to him.
(3) The Central Bank may require an auditor to undertake the following duties in addition to those provided under subsection (1)—
(a) to submit such additional information in relation to his audit as the Central Bank may consider necessary;
(b) to carry out any other special investigation; and
(c) to submit a report on any of the matters referred to in paragraphs (a) and (b), and the institution concerned shall remunerate the auditor in respect of the discharge by him of all or any of such additional duties.
(4) If the auditor of an institution, in the course of the performance of his duties under this Act, is satisfied that—
(a) there has been a serious breach of or non-compliance with the provisions of this Act, the Central Bank of Kenya Act (Cap. 491) or the regulations, guidelines or other matters prescribed by the Central Bank;
(b) a criminal offence involving fraud or other dishonesty has been committed by the institution or any of its officers or employees;
(c) losses have been incurred which reduce the core capital of the institution by fifty per cent or more;
(d) serious irregularities have occurred which may jeopardize the security of depositors or creditors of the institution; or
(e) he is unable to confirm that the claims of depositors and creditors of the institution are capable of being met out of the assets of the institution,
he shall immediately report the matter to the Central Bank.
(5) The Central Bank may arrange trilateral meetings with an institution and its auditor from time to time, to discuss matters relevant to the Central Bank’s supervisory responsibilities which have arisen in the course of the statutory audit of the institution including relevant aspects of the institution’s business, its accounting and control system and its annual accounts.
(6) If an auditor of an institution fails to comply with the requirements of this Act, the Central Bank may remove him from office and appoint another person in his place.
(7) A person shall not be qualified for appointment as an auditor of an institution if he is—
(a) a director, officer or employee of that institution; or
(b) a person who is a partner of a Director, officer or employee of that institution; or
(c) a person who is an employer or employee of a director, officer or employee of that institution; or
(d) a person who is a director, officer or employee of an associate of that institution; or
(e) a person who, by himself, or his partner or his employee, regularly performs the duties of secretary or book-keeper for that institution; or
(f) a firm or member of a firm of auditors of which any partner or employee falls within the above categories.