company audit

This query is : Resolved

Querist : Anonymous

Querist : Anonymous (Querist)

01 May 2011 dear sir/maa'am,

XYZ & co. a firm of chartered accountants has been appointed as auditors of ABC finance ltd. from which son of Mr.X, a partner of the firm took a loan of Rs. 50 lacs. Is the appointment valid???

please reply to my query as soon as possible....
thanks in advance....

CA MANOJ GUPTA

CA MANOJ GUPTA (Expert)
Follow

01 May 2011 a person who is indebted to the company for more than Rs 1000 is debarred from being applointed as auditor similar is the position if the person concerned has given guarantee or security in respect of loan of above amount or more taken by a third party
In ur case the first condition is not satisfied regarding second condition u have not mentioned anything

CA MANOJ GUPTA
JODHPUR
09828510543

Querist : Anonymous

Querist : Anonymous (Querist)

01 May 2011 if the partner has not given any guarantee.... then is the appointment valid???
will this not affect the independence of the firm since a partner's son has taken a loan????

sir please reply ......
thanks & regards....

Upgrade to CAclubindia Pro. Subscribe Now!

CA MANOJ GUPTA

CA MANOJ GUPTA (Expert)
Follow

01 May 2011 no it will not affect

Querist : Anonymous

Querist : Anonymous (Querist)

01 May 2011 thank u so much sir....

Querist : Anonymous

Querist : Anonymous (Querist)

02 May 2011 sir, can u please tell me the reason as to how will it not affect the independence of the firm.... since Mr. X's son is a relative of the partner... & his son is having a substantial interest in the company....

sir please clear my doubt... i am really getting very confused with this concept...

please help me out...
thanks in advance...