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Disqualification of Auditor
Auditing
The limit for a relative of an Auditor is one thousand or one lakh ? In the ICAI study material it is given as One lakh , but in CMA and CS they have given two limits - Rs1,000 and Rs1,00,000 . Why ?
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Thread Starter
Avasarala Vivek AdityaPrescribed by the Act ? So , if the prescribed limit is Rs50,000 , then we should ignore the one thousand and one lakh and consider the limit as Rs50,000 ?
Prescribed by rules. So you should refer rules
For law you can always refer to bare act available on MCA website. Its easy to search. (3) The following persons shall not be eligible for appointment as an auditor of a company, namely: â?? (a) a body corporate other than a limited liability partnership registered under the Limited Liability Partnership Act, 2008 (b) an officer or employee of the company; (c) a person who is a partner, or who is in the employment, of an officer or employee of the company; (d) a person who, or his relative or partnerâ?? (i) is holding any security of or interest in the company or its subsidiary, or of its holding or associate company or a subsidiary of such holding company: Provided that the relative may hold security or interest in the company of face value not exceeding one thousand rupees or such sum as may be prescribed;
CA Suraj Lakhotia Admin
As per rules (1) For the purpose of proviso to sub-clause (i) of clause (d) of sub-section (3) of section 141, a relative of an auditor may hold securities in the company of face value not exceeding rupees one lakh:
Sir, What is the main difference between those two statements ? Both seems like same Is it the interest in the company should not exceed Rs1,000 ? Kindly clarify
CA Suraj Lakhotia Admin
For law you can always refer to bare act available on MCA website. Its easy to search. (3) The following persons shall not be eligible for appointment as an auditor of a company, namely: â?? (a) a body corporate other than a limited liability partnership registered under the Limited Liability Partnership Act, 2008 (b) an officer or employee of the company; (c) a person who is a partner, or who is in the employment, of an officer or employee of the company; (d) a person who, or his relative or partnerâ?? (i) is holding any security of or interest in the company or its subsidiary, or of its holding or associate company or a subsidiary of such holding company: Provided that the relative may hold security or interest in the company of face value not exceeding one thousand rupees or such sum as may be prescribed;
Prescribed by the Act ? So , if the prescribed limit is Rs50,000 , then we should ignore the one thousand and one lakh and consider the limit as Rs50,000 ?
CA Suraj Lakhotia Admin
Prescribed by rules. So you should refer rules
Sir, So finally we have to follow the One lakh limit na ?
Priyanka R
I don't understand this part
When Act is made a minimum limit was set to 1000 and provision to keep changing the amount is give by adding "or as may be prescribed" And the changed new amounts are given / prescribed in Rules. This is done because to amend and act is very tedious but amending Rule is easy. So in the present query, the present limit is Rs.1 lakh given in rules
Sudha Reddy
When Act is made a minimum limit was set to 1000 and provision to keep changing the amount is give by adding "or as may be prescribed" And the changed new amounts are given / prescribed in Rules. This is done because to amend and act is very tedious but amending Rule is easy. So in the present query, the present limit is Rs.1 lakh given in rules
Thank you for very deep explanation Thank you so much mam
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