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Can statutory auditor act as internal auditor after removal?

Naga Praveen (Chartered Accountant) (304 Points)

03 May 2014

Hi My question is Can Statutory Auditor act as an Internal Auditor after he ceases to be statutory auditor? I mean in a company for the FY 2013-14 one CA acted as Statutory Auditor. Now the company wants to make him internal auditor for the FY 2014-15 and remove him from statutory audit. Can he accept the offer for Internal Audit? If not please quote the specific provisions that prohibits this arrangement.

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2 Replies

Rajagopalakrishnan R (PARTNER) (1422 Points)
Replied 08 May 2014

There is no bar to a statutory audtor becoming an internal auditor in future. But this may not be possible in the next following year, as the statutory auditor will hold office till the AGM. i.e even after the accounts for 31/3/2014 are signed, which may be between april and september of 2014, the auditor will be releived only when a new appointment is made in the AGM of 2014. So at best he may be able to accept the appointment for a period commencing after the AGM date in 2014

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CA Saroj Kumar (Keen to learn something new every moments) (2588 Points)
Replied 10 May 2014

Dear Sir

I have practical experience of it where my firm was Statutory auditor and after completion of period we were got selcted for Internal Auditor ....however remember period for which you are statutory audit have been done shall not clash with Internal Audit period.

And also remember the points of Raj