Is statutory audit valid?

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Amit Agarwal (Querist)
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22 December 2011 Dear Experts,

There is one private limited company whose turnover is more than 50 crores and paidup capital is 50 Lakhs.

The statutory auditor after the approval of directors has outsourced the tax planning and accounting work to his wife(Not a CA, only B.com Graduate).
Now the statutory auditor's wife is doing the accounting and tax planning work for the same company.

Now the Statutory Audit done by his husband is valid and whether he is an interested auditor?

Guest

Guest (Expert)

23 December 2011 23rd December, 2011

Dear Amit,

The statutory auditor has to ensure that he does not violate the "Maker - Checker" principle in Financial Accounting and Reporting. Even if his wife handles the Accounting and Tax Planning work, it has to be validated and authorized by an Official of the Company.

CA firms render financial accounting, auditing and tax services under one "umbrella" and so as long as the above principle is not violated, the statutory auditor is not an "interested auditor'.

FCA Prashant Chavan

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