03 January 2014
Mr X, Chartered Accountant is a partner of a firm M/s X & Co. Wife Of Mr X is a director of ABC Ltd. and in receipt of salary of Rs 30,000 pm. Can Mr x be appointed as an auditor of ABC Ltd.
04 January 2014
Appointment of Mr. X as auditor of ABC Ltd is not advisable as his wife is the Director of company receiving salary.
As per ICAI guidance note a CA should not accept audit of a company where his/her relative is on the board of directors as the will adversely affect the independence of auditor.
This is specifically prohibited under section 141(3) of the Companies Act, 2013.
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