Audit and Auditor- Companies Act' 2013 (Part-4)
ELIGIBILITY QUAL FICAT ONS AND D SQUAL F - CAT ONS OF AUDITORS [SECTION 1411 .Qualifications of an auditor [Section 141(1) & (2)J: * A person shall be eligible to be appointed as auditor of a company only if he is a Chartered Accountant within the meaning of the Chartered Accountants Act, 1949. A firm whereof majority of partners practicing in India are qualified for appointment as aforesaid may be appointed by its firm name to be auditor of a company. * Where a firm including a Limited Liability Partnership is appointed as an auditor of a company, only the partners who are chartered accountants shall be authorized to act and sign on behalf of the firm
Disqualifications of auditors [Section 141(3)] The following persons shall not be qualified for appointment as auditor of a company * A body corporate other than a limited liability partnership; an officer or employee of the company; -* a person who is a partner, or who is in the employment of an officer or employee of the company; * a person who, or his relative or partner- is holding any security of or interest in the company or its subsidia or of its holding or associate company or a subsidiary of su company Provided that the relative may hold security bP interest in the company of face value not exceeding Rs. 1,00,0 o Iding o is indebted to the company, or its subsidiary, or its holding or associate company or a subsidiary of such holding company, excess of Rs. 5 Lacs; or
has given a guarantee or provided any security in connection with the indebtedness of any third person to the company, or its subsidiary, on its holding or associate company or a subsidiary of such holding company, in excess of Rs. 1 Lacs. o *a person or a firm who, whether directly or indirectly, has business relationship with the company, or its subsidiary, or its holding or associate company or subsidiary of such holding company or associate company * a person whose relative is a director or is in the employment of the company as a director or key managerial personnel; a person who is in full time employment elsewhere or a person or a partner of a firm holding appointment as its auditor, if such persons,or partner is at the date of such appointment or reappointment holding appointment as auditor of more than 20 companies other than OPC, small companies and private companies having paid-up share capital less than 100 crore rupees.
Ceiling numbers of audits: Before appointment is given to any auditor, the company must obtain a certificate from him to the effect that the appointment, if made, will not result in an excess holding of company audit by the auditor concerned over limit laid down in section141 (3) (g) of the Companies Act, 2013 which prescribes that a person who is in full time employment elsewhere or a person or a partner of a firm holding appointment as its auditor, if such person or partner is at the date of such appointment or reappointment holding appointment as auditor of more than twenty companies; Vacation of office by an auditor [Section 141(4)1: If a person appointed as an auditor of a company incurs any of the disqualifications specified in Section 141(3), he shall be deemed to have vacated his office.
Ca Anubhav Jain
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