If a father in practise has a audit of a small pvt. Ltd. Co. and his son has book keeping job of the same pvt. Ltd. Co. ( The father is a CA and audit is in his firm's name, partnership firm and the son has book keeping job in his individual name. Son is not a CA and has nothing to do with his father's firm ) Is it legal to do audit of such Pvt. Co. by the father provided he discloses the fact, his interest in the Audit report or still the independence of such a CA will be impaired ??
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Audit and book keeping job.
Replies (2)
hi aditi
read carefully Sec 226 of companies act, there is no condition of relative in that section.
the auditor should'not be partner/employee of employee of co.
therefore father can audit and it would not be illegal.
But as per council guidelines, disclosure is required in case auditor's relative has substantial interest in the co.
in your case, son has not substantial interest in the company, he is just an employee.
therefore father can audit of co without any disclosure.
vineet
read carefully Sec 226 of companies act, there is no condition of relative in that section.
the auditor should'not be partner/employee of employee of co.
therefore father can audit and it would not be illegal.
But as per council guidelines, disclosure is required in case auditor's relative has substantial interest in the co.
in your case, son has not substantial interest in the company, he is just an employee.
therefore father can audit of co without any disclosure.
vineet
Disclosure is required. I am not quoting any section or rules, but third parties can conclude that objective of auditor is impaired. view given by ASB, UK.
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