16 July 2009
The specified number is 20 company audits is per person of which not more than 10 should be companies with a paid up capital of Rs. 25 lakhs or more.
Sometimes, a chartered accountant is a partner in a number of auditing firms. In such a case, all the firms in which he is partner or proprietor will be together entitled to 20 company audits on his account.
when an auditor is appointed to audit even a part of a company’s accounts, the part will be considered as a unit of audit for the purpose of calculation of the ceiling. In case of joint auditor each of the joint auditor is considered a part auditor for the purpose. Any joint audit held by an auditor will be included a one audit unit for the purpose of calculating the ceiling of audits. However, audit of a branch of company is not included in the computation of the ceiling. Similarly, audit of corporations which are not companies and foreign companies are also not to be included. Further, it may be noted that even non-profit companies would be counted for the purpose of ceiling.
Companies (Amendment) Act, 2000 has amended section 224(1B) by adding a proviso that provisions shall not apply to a private company on and after the commencement of the Companies (Amendment) Act, i.e. 13.12.2000. Therefore, with this amendment, while computing the ceiling a number of audits, only audit of public companies would be taken into consideration.
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