Resign as statutory auditor and join as internal auditor

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This query is : Resolved

Querist : Anonymous

Querist : Anonymous (Querist)

09 October 2013 Can a person resign as Statutory auditor of a company and join as internal auditor in the same company?? any professional ethics will get attracted??

Ganeshbabu K

Ganeshbabu K (Expert)

09 October 2013 Yes, they can resign as statutory auditor and can act as Internal auditor no problem with ethics...
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Same case seen in one of our client having turnover of 1000 crores so it is fine
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however you need to take No objecion certificate from prevous internal auditor of company

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Ajay Mishra

Ajay Mishra (Expert)

09 October 2013 ETHICAL COMPLIANCE
It will be necessary for the networked firms to comply with all applicable ethical requirements prescribed by Institute. Thus if one firm of the network is the statutory auditor of an entity then the associate firm should not accept internal audit or book keeping or such other professional assignment which are prohibited for the statutory auditor firm. The ceiling of charging non audit fees; i.e., three times of the statutory audit fees is collectively applicable in relation to the networking firms. In those cases where rotation is prescribed by any regulatory authority, no member firm of the network can accept appointment as an auditor in place of any member firm of the network which is retiring. However, this restriction shall not apply in case of appointment as Statutory Central Auditor of Government agencies/Undertaking such as Public Sector Undertakings (PSUs), Public Sector Banks and Financial Institutions etc.

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