Tax auditor related party

This query is : Resolved

Quick Summary

As a tax auditor, you're asking if you can audit firms where your relatives are proprietors. While the ICAI code of ethics generally advises against such assignments due to potential conflicts of interest, the Income Tax Act's definition of 'relative' may not cover these specific familial connections. If you do proceed, it's crucial to disclose your interests in the audit report and potentially avoid signing it yourself, especially under Section 44AB.

CA study

CA study (Querist)
Follow

29 January 2025 Hello
As a tax auditor can I do audit of a firm in which my dadaji's bhabhi is proprietor and also a firm in which my dadaji's brother's grandson is proprietor
Please answer of both queries

Nikhil Kaushik

Nikhil Kaushik (Expert)
Follow

30 January 2025 ideally you should not take up such assignments. But if you do, as per the ICAI guidance note, you need to disclose your interests in your audit report.

CA R SEETHARAMAN

CA R SEETHARAMAN (Expert)
Follow

30 January 2025 He should not sign the audit report us 44AB of that firm. Being a relative, he should not accept that audit as per code of ethics of ICAI.
The above mentioned persons will not fall under relatives under income tax hence tax audit can be done for the firms.

CA study

CA study (Querist)
Follow

27 April 2025 As in this case it not comes under ther defination of relative whether I shout do it or not please give answer

CA R SEETHARAMAN

CA R SEETHARAMAN (Expert)
Follow

27 April 2025 You can do tax audit in this case.

CA study

CA study (Querist)
Follow

27 April 2025 Thank you very much sir

CA R SEETHARAMAN

CA R SEETHARAMAN (Expert)
Follow

27 April 2025 You are welcome..
..