30 September 2010
One of my client company is private limited company where there are four directors and one of them is CA in whole time practice. My query is can he company appoint a director as a statutory auditor and can this person sign the balancesheet in both capacity i.e.as an auditor and director
If such director is employee or officer of the Company or he fall under sub section 3 of section 226 of the Companies Act, 1956 then he can not appoint as statutory auditor of the Company.
30 September 2010
To Ankurji But the director is appointed as statutory auditor and not as an employee (internal auditor).Thus he is not appointed in the capacity of employee.
30 September 2010
Section 226(3)(b) prohibits any "officer" or "employee" of the company to be appointed as a statutory auditor. Thus director being an officer cannot be appointed as an statutory auditor.