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If Audit remuneration not paid

If the company doesn't pay the remuneration to auditor or audit fees can the auditor exercise right of lein on the books of company


r.sai. Adithya

r.sai. Adithya

CA Inter

0

26-Feb-20 19:14

112

Answers (6)

Requirements of General Principles of Law : General Principles of Law- Person with lawful possession of property and worked on it can exercise lien for non-payment of his dues - Same logic can be applied to Client Books. ICAEW Conditions : The Institute of Chartered Accountants in England and Wales has expressed a similar view on the following conditions:- Auditor Can exercise lien subject to Conditions - Possession as per Authority of Client / Documents belong to Client / Client Owes Money / Fees Money is Connected with Work on those documents. Requirements of Section 128 : Sec 128 of Company Act impractical for auditor to keep possession / Company has to allow access to auditor Tdirectors / authorized persons.  Requirements of Saxena Vs Sharma & ICAI ESB Announcement : In Saxena Vs Sharma Case Supreme Court Said that professionals should not exercise line on client documents as it would lead to a problem in running client business. ICAI ESB also said if CA exercises lien it will be misconduct. Conclusion :  As per general principles & ICAEW exercising lean may seem logical but as per Section128 / Supreme Court Judgement / ESB Announcement it is impractical to exercise lien and it will lead to misconduct.


Chandan Subudhi

Chandan Subudhi

CA Inter

12K+

26-Feb-20 23:32

The auditor can exercise his lien on client's books and records subject to the following conditions: -Document retained must belong to the client who owes the money. -Such documents must have come into auditor's possession with the client's authority. -Some work must have been done and fees for work performed must be outstanding.


Suraj Lakhotia

Suraj Lakhotia

Admin

27-Feb-20 16:52

Thanks both of u


r.sai. Adithya

r.sai. Adithya

CA Inter

0

02-Mar-20 17:40

Actually my sir said 1st ans is correct


r.sai. Adithya

r.sai. Adithya

CA Inter

0

02-Mar-20 17:43

Thanks bro it is perfectly correct

Welcome !!


Chandan Subudhi

Chandan Subudhi

CA Inter

12K+

02-Mar-20 17:49

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