audit help

hie..plz help me with this confusion...

Do we count a branch audit while counting the number of companies for checking the ceiling limit on audit of companies??\

in the book at one place its written that we dont include branch audit in the count...whereas in the next page its written that audit of many more than 1 branch of the same company is counted as 1.....

plz help..m confused.... 

m talking about the ceiling limit of an auditor....

Branch audits are not to be considered

Agree with Ayyswariya..Branch Audits/Special Audits/Audits of Pvt/Foreign companies are not to be counted. Refer Sec.224(1B) for more details.

oki...thanx...

 

Hello Sneha Ji,

 

I agree with the replies of above members. In fact, your question itself gives its answer.

 

First be clear in one point that a CA can carry out maximum of 20 companies Audit in his individual capacity.

Secondly, a firm of CA’s can carry out Company audit to the tune of Number of partners * 20(individual limit). In no case individual limit should exceed.

 

Regarding the confusion in your question, remember that both Head office & its branches is one unit as long the appointment letter states that particular CA is eligible to carry out its audit. Suppose you are a CA of Reliance Digital equipments Ltd.  The Pan India branches are 100 and you have got appointment letter (1^st) to audit its Head office + 5 branches network. In this case your limit will be taken as audit for 1 company. Suppose you have left over limit of 19, you can very well use it for another assignment subject to the conditions of appointment letter & Sec. 224.

 

Now suppose if you get another appointment letter (2^nd) from same head office regarding the audit of 1 more network at Delhi. This separate appointment letter will be considered as 1 audit in your individual capacity. So now you have exhausted 2 audit limits.

The above limit will be subjected to firm limit (if you are a partner in any firm say,PWC). Suppose PWC has exhausted its maximum limit of Company audit after your acceptance of 1^st appointment letter & assuming you are not a partner in any other firm then you cannot accept 2^nd appointment letter for PWC.

 

I hope i have made myself clear in the above points. Revert back, for any further doubts.

so the 2nd appointment letter for the delhi branch will be counted as an audit...

 

so in your opinion branch audit will be included?????

 

a simple question...i am appointed to audit a branch of xyz ltd......will it be included for calculating  my ceiling???

just becoz u are receiving 2 separate appointment letters from the same company u are counting it as 2 for your ceiling limit????

m confused to the core....

Dear Sneha..no need to be confused..Branch audits are not considered in calculating the ceiling limit. The limit is with reference to only the appointments made u/s 224. Suppose you are appointed to audit any branch of a company. A different person is appointed u/s 224 to undertake audit of the company as a whole. Then, the branch audit undertaken by you will not be considered for ceiling purpose. Now if you are also the company auditor, still the branch audit will not be counted..but the company audit accepted by you will be counted.

Hope you got it cleared.