According to Sec.226(3)(d), A person who is indebted to the company for an amount exceeding Rs.1,000 or who has given any guarantee of any third person to the company for an amount exeeding Rs.1,000 shall not be qualified for appointment as an auditor of company.
On the other side,According to 'Council General Guidelines,2008',a member of the institute in practice or a firm shall not accept appointment as auditor of a concern while indebted to the concern or given any guarantee or provided any security in connection with the indebtness of any third person to the concern,for limits fixwed in the statute and in other cases for amount exceeding Rs.10,000/-
My Q. is that u/s 226(3),the amt.of indebtness is Rs.1000 for disqualification and under "Council General Guidelines,2008, the amt. of indebtness is Rs.10,000.Why this difference?How should it be dealt?Please reply.
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