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Tax Audit - by son

Preeti (Consulting) (159 Points)

14 November 2008

Can a son do audit of his father books?

Is it not possible to do so or the same can be mentioned in Audit report?

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11 Replies

CA. Shikha (Chartered Accountant) (4143 Points)
Replied 14 November 2008

No, a son cannot do.

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CA Pawan Goswami (CA) (2928 Points)
Replied 14 November 2008

No, a son cannot do tax audit.

CA. Prashanth Kumar Jain (Chartered Accountant) (68 Points)
Replied 14 November 2008

since there is direct relation between the auditor and auditee independence of auditor can not be ensured. Hence auditor must avoid the acceptance as auditor

Rakesh Parmar (Practice) (70 Points)
Replied 14 November 2008

Is that true ??? and if u r sure tell me whr its written(in any book) because i knw one CA doing tax audit of his dad.

vijay (student) (24 Points)
Replied 21 November 2008

According to the Chartered Accountants Act, 1949, a professional and practising chartered accountant cannot express an opinion on the financial statements of an enterprise, in which his relatives have a substantial interest unless he discloses such interest in his audit report.

Here the term "relative" has the same meaning as it is defined in the Companies Act, 1956. And similarly, the term "Substantial Interest" has the same meaning as it is defined under the income-tax act, 1961.

As per the companies Act, 1956 the term Relative includes Father also.

Therefore, a son can do the audit of his father's books of accounts provided he discloses the fact in his audit report.

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Ankit kumar (Student) (1691 Points)
Replied 22 November 2008

no,he cant do

CA. Dashrath Maheshwari (TaXpert) (15108 Points)
Replied 10 June 2009

as per recent clarifications given by the ICAI, a CA can not audit his direct relatives business.
https://www.icai.org/resource_file/11449p752-757.pdf

Amol Gopal Kabra (CA,CS,DISA) (Practicing CA) (8639 Points)
Replied 13 June 2009

Originally posted by :vijay
"	According to the Chartered Accountants Act, 1949, a professional and practising chartered accountant cannot express an opinion on the financial statements of an enterprise, in which his relatives have a substantial interest unless he discloses such interest in his audit report. Here the term "relative" has the same meaning as it is defined in the Companies Act, 1956. And similarly, the term "Substantial Interest" has the same meaning as it is defined under the income-tax act, 1961. As per the companies Act, 1956 the term Relative includes Father also. Therefore, a son can do the audit of his father's books of accounts provided he discloses the fact in his audit report.	"

Earlier it was allowed after giving a specific disclosure obout the relation. However, ICAI has ammended the regulation whereby a chartered accountant cannot audit the books of accounts of his relatives.