Section 144 of Companies Act, 2013

Mayank Mandora , Last updated: 25 August 2018  
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Section 144 of the Companies Act, 2013 which carries out other services which can not be provided by an auditor the section reads out as follows:

An auditor shall provide to the company only such other services which are approved by Board of Directors(BOD) and/or Audit Committee, but which shall not include any of the following services (whether such services are rendered directly or indirectly) to the company or its holding company or subsidiary company, namely:-

  1. Accounting and book keeping services
  2. Internal audit
  3. Design and implementation of any financial information system
  4. Acturial services
  5. Investment advisory services
  6. Investment banking services
  7. Rendering of outsourced financial services
  8. Management services
  9. Any other kind of services as may be prescribed.

Further explanation has also been provided regarding the term directly or indirectly, which means-

  1. For auditor who is an individual, either himself or through his relative or any person associated or connected to such individual, or through any other entity, whatsoever, in which individual has significant influence or control, or whose name or trade mark or brand is used by such individual.
  2. For auditor being a firm, wither itself or through its partners or through its paren, subsidiary or associate, whatsoever, in which firm or its partners have significant influence or control, or whose name or trade mark or brand is used by firm or its partners.

Now the another confusing term which is used here is Significant Influence, which means power to participate in the operating and financial policy decisions and if a person(in case of individual) or a firm(either itself or through its partners) holds 20 percent voting power, then it is presumed to be have significant influence.


CCI Pro

Published by

Mayank Mandora
(CA in Practice)
Category LAW   Report

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