clarification

This query is : Resolved

Querist : Anonymous

Querist : Anonymous (Querist)

20 January 2011 Can an Auditor of a Listed Company hold shares in the name of his wife, of the same company for which he is appointed as an auditor.Also pls let me know the relevant scetion or ammendment in respective section.

Jayashree S Iyer

Jayashree S Iyer (Expert)
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21 January 2011 As per Section 226(3) a person holding any security of the company is not qualified for appointment as auditor of a company. As per the Act there is no restriction for an auditor's wife holding the shares of the company.

Whether there are any restrictions as per the listing agreement?

Experts please clarify.

udit sharma

udit sharma (Expert)
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21 January 2011 Agreed with Expert. To the best of my knowledge, no such restrictions have been imposed by the Listing Agreement.

God Bless

CS Udit Sharma

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CA Bosu babu

CA Bosu babu (Expert)
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21 January 2011 By interpreting the sec.226(3), by plain words it is like auditor or his firm shd not have any shares. But it doesnt restrict to hav by his wife.

so she can very well purchase d same....

but my dear, here is the ethical thing comes in...suppose tat company bcam d news f week for some corruption, then they will point out this issue and ultimately it will become a black mark for u....

so better not to hav...

Jayashree S Iyer

Jayashree S Iyer (Expert)
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21 January 2011 Yes, I fully agree with Bosu that ethically the auditors or his family members should not have any shares of the company in which he or his firm is being appointed an auditor.