Partner in 2 firms having bank audit
This query is : Resolved
19 September 2025
Can I be a partner in two firms who are trying to get bank audit or after one firm gera audit can I partner in another firm trying to get bank audit.will it pose any problem to that firm trying to get audit or post getting audit will it become a problem for them or will it be a problem for me in any case
19 September 2025
A person cannot be a partner in two firms if both are applying for bank audit or if one already has a bank audit assignment and the other is trying to obtain one. This is specifically restricted by RBI guidelines, which mandate "exclusive association"—a full-time partner should not be a partner in other firms for audit eligibility in banks and large NBFCs. If a partner is associated with two firms, this will make both firms ineligible for bank audit assignments, both at the application stage and during the audit tenure.
19 September 2025
RBI Guidelines & Exclusive Association
RBI guidelines require that, for appointing statutory auditors in banks, full-time partners of a firm must not be partners in any other firm.
If a full-time partner is shown in more than one firm, neither firm will be eligible for bank audit empanelment or assignment.
In joint audit arrangements (where two CA firms are appointed), both firms must not have any common partners or be from the same network.
RBI guidelines require that, for appointing statutory auditors in banks, full-time partners of a firm must not be partners in any other firm.
If a full-time partner is shown in more than one firm, neither firm will be eligible for bank audit empanelment or assignment.
In joint audit arrangements (where two CA firms are appointed), both firms must not have any common partners or be from the same network.
19 September 2025
Problems for Firms and Individuals
Application Stage: If a person is a partner in two firms seeking audit, both will be disqualified for having common partners.
Post-Assignment: If a partner joins another firm trying for bank audit after one firm already obtained an audit, both can become ineligible, as banks and RBI check for overlapping partnerships periodically.
For Proprietors: This rule applies to LLPs and partnership firms, making double partnership clearly non-compliant.
Application Stage: If a person is a partner in two firms seeking audit, both will be disqualified for having common partners.
Post-Assignment: If a partner joins another firm trying for bank audit after one firm already obtained an audit, both can become ineligible, as banks and RBI check for overlapping partnerships periodically.
For Proprietors: This rule applies to LLPs and partnership firms, making double partnership clearly non-compliant.
19 September 2025
Risk to Firms and Partners
Both firms risk removal from empanelment and possible blacklisting if found violating exclusive association norms.
Individual partners may be reported for ethics violation with ICAI, leading to disciplinary action.
If the situation arises after audit allocation, banks must inform RBI, and there could be special review or removal.
In short, being a partner in two firms that are seeking or carrying out bank audits is strictly prohibited by the RBI, and doing so will disqualify both the individual and the firms from credible assignments and can lead to regulatory action.
Both firms risk removal from empanelment and possible blacklisting if found violating exclusive association norms.
Individual partners may be reported for ethics violation with ICAI, leading to disciplinary action.
If the situation arises after audit allocation, banks must inform RBI, and there could be special review or removal.
In short, being a partner in two firms that are seeking or carrying out bank audits is strictly prohibited by the RBI, and doing so will disqualify both the individual and the firms from credible assignments and can lead to regulatory action.
19 September 2025
Implications for Non-Working Partners
The disqualification applies to all forms of partnership, including non-working or sleeping partners.
Auditors must be exclusively associated with the firm and cannot be involved with multiple firms or be part of any other activity deemed as practice under the Chartered Accountants Act.
Problems arise both for the individual and the firms involved, risking ineligibility for the ongoing and future audit assignments.
The disqualification applies to all forms of partnership, including non-working or sleeping partners.
Auditors must be exclusively associated with the firm and cannot be involved with multiple firms or be part of any other activity deemed as practice under the Chartered Accountants Act.
Problems arise both for the individual and the firms involved, risking ineligibility for the ongoing and future audit assignments.
19 September 2025
Good Luck...
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