27 January 2012
As per section 226(3) None of the following persons shall be qualified for appointment as auditor of a company— (a) a body corporate;
(b) an officer or employee of the company;
(c) a person who is a partner, or who is in the employment, of an officer or employee of the company;
(d) a person who is indebted to the company for an amount exceeding one thousand rupees, or who has given any guarantee or provided any security in connection with the indebtedness of any third person to the company for an amount exceeding one thousand rupees;
5[(e) a person holding any security of that company after a period of one year from the date of commencement of the Companies (Amendment) Act, 2000.
Explanation.—For the purpose of this section, “security” means an instrument which carries voting rights.]
Explanation.—References in this sub-section to an officer or employee shall be construed as not including references to an auditor.