Libro I · Título I · Capítulo VI Sección Quinta. Fiscalizacion

The corporate operations shall be audited by the shareholders themselves, by one or several accountants or auditors, or by one or several statutory auditors, in accordance with the provisions of the articles of incorporation and the provisions of this chapter. The articles of incorporation may establish that the auditing be exercised by more than one of the systems indicated above.

The accountants, auditors or statutory auditors must be designated by the annual ordinary assembly that makes the election of directors; and for the exercise of their functions they shall depend exclusively on the assembly, to which they shall render their reports. If there are more than two statutory auditors, they shall act separately. In the same annual ordinary assembly, the alternate accountants, auditors or statutory auditors shall be elected, and they shall exercise the auditing functions only in the absence of the titular ones.

If, notwithstanding the foregoing, the auditors or statutory auditors are not designated, without prejudice to the fact that the right of the shareholders to examine, by themselves or through experts, the accounting and the documents of the company is maintained, any number of shareholders, even if they represent a minority, has the right to appoint an auditor or statutory auditor so that, on account of the company, he or she audits the corporate operations until the general assembly makes the corresponding designation.

For the election of statutory auditors, who may or may not be shareholders, if there is more than one, the procedure determined in Article 115 of this Code shall be followed.

For the removal of the auditors or of the statutory auditors, the procedure established for the removal of directors in Articles 178 and 179 of this Code shall be followed.

The auditors or the statutory auditors have the following powers, in addition to the others conferred on them by special laws, the articles of incorporation or the general assembly:

1ºTo audit the administration of the company and examine its general balance sheet and other accounting statements, in order to ascertain their veracity and reasonable accuracy.

2ºTo verify that the accounting is kept in legal form and using generally accepted accounting principles.

3ºTo carry out periodic counts of cash and securities.

4ºTo require from the directors reports on the development of the corporate operations or on specific transactions.

5ºTo convene the general assembly when grounds for dissolution arise and matters are presented that, in their opinion, require the knowledge of the shareholders.

6ºTo submit to the board of directors, and to have inserted in the agenda of the meetings, the points they deem pertinent.

7ºTo attend, with voice but without vote, the meetings of the board of directors, when they deem it necessary.

8ºTo attend, with voice but without vote, the general assemblies of shareholders and present their report and opinion on the financial statements, including the initiatives that in their judgment are appropriate.

9ºIn general, to audit, supervise and inspect at any time the operations of the company.

The following may not be auditors or commissioners of the company:

1ºPersons who are not Guatemalan citizens.

2ºProfessionals who are disqualified from the practice of their profession.

3ºThose who, in accordance with the law, are disqualified from being merchants.

4ºThe employees or officers of the company.

5ºPersons who are, in relation to the administrators or managers of the company, in the situations that give rise to the recusal of judges.

Any shareholder may report in writing, to the auditors or commissioners, the acts of the administration that he or she deems irregular, and these, in their reports to the general meeting, must state regarding such reports the considerations and proposals they deem appropriate for discussion and resolution at the meeting itself.

The accountants, auditors or commissioners are bound to perform their duties with all diligence and are liable to the shareholders of the company in the manner established in the Civil Code for professionals. The accountants, auditors or commissioners shall observe due confidentiality regarding the facts and documents that come to their knowledge by reason of their office.

When for any cause the auditing organ is lacking, the board of directors must convene the general shareholders' meeting within a term of three days, so that it makes the corresponding designation. If the board of directors does not make the call within the indicated time limit, any shareholder may apply to the Judge of First Instance of the domicile of the company, so that he or she makes the call.

If the general meeting is not held or, if held, the designation is not made, the judicial authority of the domicile of the company, at the request of any shareholder, shall appoint the commissioners, accountants or auditor, who shall serve until the general shareholders' meeting makes the definitive appointment.

Auditors or commissioners who have a direct or indirect personal interest in any operation must abstain from any intervention and inform the next general meeting of the matter, under penalty of being liable for the damages they cause to the company.

To the extent compatible, the provisions contained in the section relating to Administration shall apply to the auditor, accountant or commissioners.