Company audit 1

As per Sec. 226(3)(e), the legislator has introduced a very strigent requirement whereby an auditorshall not be able to hold even a single share or any other kind of security.A firm would be disqualified to be appointed as an auditor even one partner is diqualified under this clause.

Now my question is:

whether the firm of  auditors  would be disqualified under this particular clause only in case any one or more of the auditors are disqualified or in any other Sections it would be the same result.

i.e i am asking you that disqualification of firm is limited to this clause only or apply to other cases also where a partner is diqualified under sec. 226(4) or other provisions.

I am asking is that if a partner of a firm of CAs is disqualified under other than provisions stated above than result will be the same or the firm still can be appointed as auditors of another  company/ companies ?

Replies (6)

According to me entire firm and all partners would be disqualified for all purposes and for all assignments under companies act, 1956 just because of the mistake of one partner.


Other views solicited.

Hi, if a single partner of a firm is disqualified under any clause, then i think the same applies to the firm too...

 

Reason is very obvious, a firm does not have its own legal identity, its the partners who represent the firm. So if any one or some or all of the partners are diqualified, then the firm is ought to disqualify...

 

Sorry for late reply, was bit busy

yes the whole firm is disqualified

good question.

when the bare act is read , your question becomes very valuable.it gave me weird thoughts. expert opinion is required to solve this question as accoding to the act " the person is disualified " . wts the definition of person here... and is it anywhere else mentioned that the whole firm is liable.Though technically speaking wt Ankur sir has said is right, the mistake of a partner must be suffered by the firm itself.. but sir can you pls refer to the said act.

whole firm is disqualified.......as firm is nothing other than representative of partners...so if a single partner is disqualified then whole firm is disqualified......

The Whole firm is disqualifid  voting rights gentleman if voting rights are thr u bcme the owner .

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