Audit Qualification on continuance of Business after Death of one of the partner

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This discussion addresses the complexities of audit qualification for a partnership firm where one of two partners has passed away. The firm continues to operate and file returns, but the death reduces the partner count below the minimum required for a partnership. Advice is sought on whether an auditor can accept the engagement, what qualifications are needed in the audit report, and recommendations for the firm to include legal heirs as partners to ensure compliance.

Rajesh

Rajesh (Querist)
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01 September 2023 Hi,
A partnership firm is registered with 2 partners and one partner dies in March 2021 , but the firm continues its business activities till date and files his GST and Income Tax return in Firm status. As one of the two partners dies, the firm should be dissolved as the number of partners after death is below 2.
This year the turnover is above 2 crore and its liable for 44AB audit. Please advice whether an auditor can accept the engagement and if yes, what audit qualification has to be put on the audit report and other matters also.

CA R SEETHARAMAN

CA R SEETHARAMAN (Expert)
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01 September 2023 Advice the firm to include legal heir or some other person to include as partner and continue the business.
If he is not accepting don't accept the audit.

Rajesh

Rajesh (Querist)
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01 September 2023 Thanks for the reply.

CA R SEETHARAMAN

CA R SEETHARAMAN (Expert)
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02 September 2023 You are welcome..
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