Opinion on company law. regarding auditor qualifications

506 views 2 replies

Need an opinion on New Companies Act, 2013, Regarding auditor eligibility/qualifications. The facts are as under:

1.      There is a DSE listed company A .

2.      Y is auditor for company A

3.      There is Director X in company A

4.      There is Pvt Ltd co B formed on Sep 2013

5.      The shareholders  of B ltd includes X 85% and wife of the auditor 15%

6.      Now can Y audit company A or would it be disqualified for the same on grounds of independence etc. for              FY 13-14 and FY 14-15

7.      If cant audit then process to change auditor , calling EGM etc and whether change in Mar 14 or May 14.

 

         Thanks

Replies (2)

Hi Yogita,

 

In my view, Y does not fall in any of the criterias mentioned in section 141....so Y can audit the accounts of X ltd.

Regards

As per Section 141(3)(d)(i) read with Rule 10 of the Companies (Audit & Auditors)Rules 2014, a relative of an auditor may hold securities in the company of face value not exceeding rupees one lakh:   Provided that in the event of acquiring any security or interest by a relative, above the threshold prescribed, the corrective action to maintain the limits as specified above shall be taken by the auditor within sixty days of such acquisition or interest.

Hence I may suggest to check the value of 15%. If it exceeds the threshold limit, corrective action to maintain the level can be taken by the auditor.

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