Go Ad-Free on CAclubindia with Daily Mobile Updates. Subscribe Now!

can relative of a director appointed as auditer of the compa

RAVI TEJA S (student) (706 Points)

21 October 2009

pls tell me

can relative of a director appointed as auditer of the company. plss provide detail information on this...

Reply
Follow
Share

6 Replies

vivek (CA ) (86 Points)
Replied 22 October 2009

Originally posted by :RAVI TEJA
"	pls tell me can relative of a director appointed as auditer of the company. plss provide detail information on this...	"

. yes,but a special resolution for this has to be passed for this under section 314 of the companies act.

Upgrade to CAclubindia Pro. Subscribe Now!

Ankur Garg (Company Secretary and Compliance Officer) (114773 Points)
Replied 22 October 2009

Hi Ravi,

Appointment of a relative of a director as an auditor should not be made

In the legal sense a relative of a director of a company is not disqualified for appointment as an auditor of the company. However, special resolution under section 314 shall be passed if the remuneration of auditor exceeds the limits specified in section 314.

However, the council of the Institute of Chartered Accountants of India has suggested that a chartered accountant shall not accept the audit of a company where he is relative of the company's managing director or whole-time director and he believes that he would not be in a position to express his independent opinion.