08 June 2009
Can a Proprietor liable to get his books audited u/s 44AB get his books audited and his balance sheet signed from his Son who is Practising Chartered Accountant or some rule prevents such audits?
10 June 2009
According to the Chartered Accountants Act, 1949, a professional and practising chartered accountant cannot express an opinion on the financial statements of an enterprise, in which his relatives have a substantial interest unless he discloses such interest in his audit report.
Here the term "relative" has the same meaning as it is defined in the Companies Act, 1956. And similarly, the term "Substantial Interest" has the same meaning as it is defined under the income-tax act, 1961.
As per the companies Act, 1956 the term Relative includes Father also.
Therefore, a son can not do the audit of his father's books of accounts unless he discloses the fact in his audit report.
10 June 2009
BUT as per recent clarifications given by the ICAI, a CA can not audit his direct relatives business. http://www.icai.org/resource_file/11449p752-757.pdf
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