Can a Statutory Auditor be appointed as an Accountant of the company.
If No, then what are the provision regarding penalties to the Auditor as well as to the Company under Companies Act, 1956 & 2013 or under other laws ( CA Code of Ethics, SEBI Act etc).
PS: Kindly support your reply with the relevent Section No. of the respective Act for better clarification & Understanding.
Thanks in advance
As per section 144 of companies act 2013, auditors are not allowed to render certain services like
(a) Accounting and book keeping services
(b) internal audit
(c) design and implementation of any financial service etc
further As per section 147(1) of companies act 2013, if any of the provision is contravented (it includes section 144) the company shall be punishable with fine which shall not be less than twenty-five thousand rupees but which may extend to five lakh rupees and every officer of the company who is in default shall be punishable with imprisonment for a term which may extend to one year or with fine which shall not be less than ten thousand rupees but which may extend to one lakh rupees, or with both.
Further more as per section 147 (2), if auditor contravenes ( Includes above mention section 144) then he shall be liable with a fine of not less than 25 thousands but which may extend to 5 lakhs rupees.
Provided that if an auditor has contravened such provisions knowingly or wilfully with the intention to deceive the company or its shareholders or creditors or tax authorities, he shall be punishable with imprisonment for a term which may extend to one year and with fine which shall not be less than one lakh rupees but which may extend to twenty-five lakh rupees.
I have heard a guidelines by Institute for its member regarding the services to be provided. But due to unsurity I am not able to mention those things.
Hope the above reference will be helpful to you.
Regards
Dipendra Prasad Poudel
Is there any provision for the same in Companies Act, 1956 or SEBI Act or is there any guideline issued by MCA or ICAI regarding the same?
I don't think there were any such provisions. I will refer it to book ( currently not with me) then i will reply regarding companies act 1956 but sorry i have zero knowledge regarding SEBI guidelines.
Thank you for your quick response.
CAclubindia
