Appointment of auditor

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CA Trinath Galla

student

2288 Points Posted on 07 September 2011

A person is disqualified from being appointed as auditor of a company if he was disqualified from being appointed as aduitor of its holding or subsidary or the subisidary of that comapny's holding company......is the disqualification mentioned u/s.226 of companies act.

Now it is apparent that if a person is disqualified from being appointed as auditor of a company, he is also disqualified from being appointed as auditor of that comapnies subsidary, but for the subsidary of its subsidary.

For example...... A is subsidary of B. C is subsidary of A.Now if a person was disqualied from being appointed as auditor of B.Then he is also disqualified from bein appointed as auditor of A but not C.

Am i correct???????????????

Replies (5)

devang

CA FINAL article

131 Points Posted on 08 September 2011

no..

auditor is disqualified in A as well as C also.

Keval

Consultant

94 Points Posted on 09 September 2011

It is mentioned in Section 226 subsection (4) "A person shall also not be qualified for appointment as auditor of a company if he is disqualified for appointment as auditor of any other body corporate which is that company‘s subsidiary or holding company or a subsidiary of that company’s holding company, or would be so disqualified if the body corporate were a company.

I agree with Mr. Devang that the person is also disqualified in A as well as C.