1035. Effect of lack of independence
(1) If at any time during his term of office an auditor becomes prohibited from acting by section 1034(1), he must immediately—
(a) resign his office (with immediate effect), and
(b) give notice in writing to the audited person that he has resigned by reason of his lack of independence.
(2) A person will commit a contravention of these Regulations if—
(a) he acts as an auditor in contravention of section 1034(1), or
(b) he fails to give the notice mentioned in paragraph (b) of subsection (1) in accordance with that subsection.
(3) A person who commits the contravention referred to in subsection (2)(a) shall be liable to up to a level 4 fine.
(4) A person who commits the contravention referred to in subsection (2)(b) shall be liable to a level 3 fine.
(5) In proceedings against a person for any contravention under this section it is a defence for him to show that he did not know and had no reason to believe that he was, or had become, prohibited from acting as auditor of the audited person by section 1034(1).