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Disqualification of Auditor

20 August 2018

Mr. X and his wife Mrs. Y are both CA's holding COP. Mrs. Y has a loan from a Pvt Ltd Co. ₹3lacs for which Mr. X is a Guarantor. Can Mr. X or Mrs. Y or both be appointed as a Auditor of Pvt Ltd co. ?
Pls tell individual implications also !?

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3 Replies

CS Smreti (cs) (641 Points)
Replied 20 August 2018

Yes both can be appointed. Refer Section 141(3)(d)(ii) and (iii)read with Rule 10 of chapter 10 states disqualification applicable in case if indebtedness is more than of 5 lac rupees.

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Sudhir Todkar (CS Professional) (1021 Points)
Replied 20 August 2018

Mrs. Y can be appointed as an auditor of that company.

Mr. X cannot be appointed an an auditor because it's more than the threshold value i.e. 1Lakh.

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sanjib Kumar (successful man) (43 Points)
Replied 20 August 2018

Only x is disqualified for the appointment ofauditor in pvt ltd because

In case of mr x - he is provide guarante of 3 lakh which is exceed the limit of 3 lakh so he is disqualified

Incase of mrs y - her relative( i.e mr x) provide guarante for her (i. E she is not third-party for mx x )) so she is not disqualified for appointment

Note - in act it has been clearly mentioned 3 party