03 October 2008
X, a CA in practice is a statutory auditor of MNO Ltd. he purchased a car from the company under a hire purchase scheme run by the company on the same terms and conditions as applicable to all other customers. the cash down price of the car is Rs.80000.00. the initial payment of 25% was made on signing the hire purchase agreement and the balance is payable in monthly instalments of Rs.750.00 each. comment whether or not the auditor has become indebted and is thus disqualified to act as auditor.
05 October 2008
my question is that the auditor is not indebted for more than Rs.1000.00 at a single point of time as the monthly inastalments are of Rs.750.00. but the total amount to be paid is Rs.60000.00 (75% of 80000.00). will we consider the total amount or the individual instalment amount for the indebtness
07 October 2008
Total amount of indebtedness is what is to be considered nand not the instalment. You have to understand the difference btween indebtedness and instalment falling due.
CAclubindia
