If Audit remuneration not paid

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

CA Final

★ 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.

CA Suraj Lakhotia

Admin

27-Feb-20 16:52

Thanks both of u

Thread Starter

r.sai. Adithya

CA Inter

★ 0

02-Mar-20 17:40

Actually my sir said 1st ans is correct

Thread Starter

r.sai. Adithya

CA Inter

★ 0

02-Mar-20 17:43

Thanks bro it is perfectly correct

Thread Starter

r.sai. Adithya

CA Inter

★ 0

02-Mar-20 17:46

Welcome !!

Chandan Subudhi

CA Final

★ 12K+

02-Mar-20 17:49