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3 important questions related to sec 141(3)(d)

We know that a person whose relative or partner is holding security or interest in the company of FV not exceeding Rs 100000 shall NOT be disqualified. Q1ã??What if One relative is holding shares of FV Rs 21000 and another relative is holding shares of FV Rs 82000. Is he disqualified? Q2ã??The section lays down that within 60 days of acquisition of shares or interest by relative exceeding, "corrective action" must be taken. What does this corrective action mean to say actually? Does it require the person (auditor) to ask and force his relative or partner to sell some of his shares so as to come down below Rs 100000 worth holding or does it intend that person himself shall have to vacate office as per 141(4)? Q3ã??Say I am the auditor. X is my brother, who lives far far away. The last time we met or communicated was in a prehistoric era. He purchased shares worth Rs 4,00,000 in B Ltd, which is the subsidiary of A Ltd., the company of which I am the principal auditor. I obviously did not get it know about his acquisition. 60 days have passed and corrective action was not taken. What is the consequence?


Kumarjit Dey

Kumarjit Dey

CA Inter

4K+

10-Nov-20 09:04

14

Answers (1)

1. It is per relative. 2. the corrective action to maintain the limits as specified above shall be taken by the auditor within sixty days of such acquisition or interest. 3. You would be held responsible as auditor whether or not you were in communcation.


Suraj Lakhotia

Suraj Lakhotia

Admin

10-Nov-20 14:17

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