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Can auditor purchase debentures of company in which he is appoint as auditor ?
in company act 2013 , auditor become disqualified as auditor if he indebt to company more than 500000 Rs .... but what if he hold securities like debenture of company in which he appoint as auditor .....
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As per Sec 141(3)(d)(i), if a person(auditor) or his partner or relative is holding any security (whether or not having voting rights) in the company or its subsidiary or its holding or associate company or a subsidiary of such holding co. then such person shall be disqualified from being appointed as auditor of the company.However, the relative of the auditor may hold securities for the face value not exceeding Rs. 1 lacs.
Please note: such exception only for relative and not for holding security by auditor or his partner.
Therofore,auditor cannot hold debentures of auditee company.
Yes, He is disqualified for appointing as an auditor of companies as per sec 141 of companies Act , 2013.
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