Can Statutory Auditor firm of a subsidiary become concurrent auditor of its parent NBFC Company? If Yes then is there any cooling period prescribed for becoming concurrent auditor?
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Can Statutory Auditor of a subsidiary become concurrent auditor of its parent NBFC Company?
Replies (1)
As per the Companies Act 2013 and the Reserve Bank of India (RBI) guidelines, a statutory auditor firm of a subsidiary can become the concurrent auditor of its parent NBFC (Non-Banking Financial Company) subject to certain conditions.
Yes, a statutory auditor firm of a subsidiary can become the concurrent auditor of its parent NBFC Company.
However, there are certain conditions and cooling periods prescribed:
1. The statutory auditor firm must not have audited the parent NBFC company in the immediately preceding financial year.
2. The statutory auditor firm must not have any conflict of interest or professional relationship with the parent NBFC company or its subsidiaries.
3. The statutory auditor firm must comply with the RBI's guidelines on auditor rotation and cooling-off periods.
The cooling period prescribed is: -
2 years: A statutory auditor firm that has audited a subsidiary company cannot audit the parent NBFC company for a period of 2 years from the date of completion of the audit of the subsidiary company. -
3 years:
A statutory auditor firm that has audited a parent NBFC company cannot audit any of its subsidiary companies for a period of 3 years from the date of completion of the audit of the parent NBFC company. Please consult the Companies Act 2013, RBI guidelines,
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