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holding period of auditor firm

Ambika (1 Points)

02 March 2018

as per section 139(1) holding period of subsequent auditor firm is 5 year or 10 year

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7 Replies

Divakar (Student CA Final ) (11857 Points)
Replied 02 March 2018

For individual it is 5 yrs and for firm it is 10 yrs

CA Amrita Chattopadhyay (Audit & Assurance) (13459 Points)
Replied 03 March 2018

Rightly said 5 year for individual firm and 10 year for partnership firm. However, there has to rotation of auditors in the partnership firm after 5 years.

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Divakar (Student CA Final ) (11857 Points)
Replied 03 March 2018

But mam in case of an audit firm rotation of auditor is after completing of its two term of five consecutive years..... And rotation is for five year for both as well individual auditor and audit firm

CA Amrita Chattopadhyay (Audit & Assurance) (13459 Points)
Replied 03 March 2018

In case of the partnership firm, the rotation is for the auditor and not for the firm. The same can continue to do the audit even after 5 years but the signing partner has to be changed.

Divakar (Student CA Final ) (11857 Points)
Replied 03 March 2018

an individual auditor who has completed his term under clause [a] shall not be eligible for re-appointment as auditor in the same company for five years from the completion of his term; [ii] an audit firm which has completed its term under clause [b], shall not be eligible for re-appointment as auditor in the same company for five years from the completion of such term: Provided further that as on the date of appointment no audit firm having a common partner or partners to the other audit firm, whose tenure has expired in a company immediately preceding the financial year, shall be appointed as auditor of the same company for a period of five years:

Divakar (Student CA Final ) (11857 Points)
Replied 03 March 2018

It is on shareholders who decided for rotation of auditor in that audit firm..... But after completing of tenure according to section 139(1) in case of individual one term of 5 years and in case of audit firm 2 term of 5 consecutive years.... Rotation is for 5 years

Divakar (Student CA Final ) (11857 Points)
Replied 03 March 2018

No listed company or a company belonging to such class or classes of companies as may be prescribed, shall appoint or re-appoint— [a] an individual as auditor for more than one term of five consecutive years; and [b] an audit firm as auditor for more than two terms of five consecutive years: