Appointment of Director as a Statutory Auditor

This query is : Resolved

Querist : Anonymous

Querist : Anonymous (Querist)

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

Ankur Garg

Ankur Garg (Expert)
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30 September 2010 No it is not possible.

He is disqualified to be appointed as statutory auditor by virtue of section 226(3)(b) bcoz he is director (officer) of the company.

Any officer of the company is prohibit to be appointed as auditor.

Thanks

Ajay Mishra

Ajay Mishra (Expert)
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30 September 2010

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.

Regards

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Querist : Anonymous

Querist : Anonymous (Querist)

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.

CA Suraj Lakhotia

CA Suraj Lakhotia (Expert)
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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.