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Company audit

ankita (Coaching) (73 Points)

21 August 2011

In ceiling of audit its mentioned that if the partner is a full time employee else where he doesnt get any audits to do.But if he is an employee else where wont he fall under the disqualifications u/s 226 ?and the firm wil get disqualified as an auditor?please advice

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vaibhav (CA) (49 Points)
Replied 21 August 2011

The partner in full time emplyment may not be holding certificate of practice so he is not qualified to be appointed as an auditor. As the section says "226. QUALIFICATIONS AND DISQUALIFICATIONS OF AUDITORS.

(1) A person shall not be qualified for appointment as auditor of a company unless he is a chartered accountant within

the meaning of the Chartered Accountants Act, 1949 (38 of 1949) :

Provied that a firm whereof all the partners practising in India are qualified for appointment as aforesaid may be appointed by its firm name to be auditor of a company, in which case any partner so practising may act in the name of the firm."

you are thinking in right direction the firm will also get disqualified.

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Sumit Grover (Chartered Accountant ) (3652 Points)
Replied 21 August 2011

Bt practically, part time COP bhi hote hain...........

vaibhav (CA & CS) (577 Points)
Replied 21 August 2011

Hi Ankita,

Pls note that:

1) if CA has taken COP then he cannot become employee anywhere if he does so he will be guilty of profesional miscouduct.

2) Section 226 of companies act 1956.does not talk abt disqulifciation of member who has taken cop and serving as employee.

3) Section 226 does not cover the disqalfication of firm in which proffesional misconduct is done by the practising CA

ankita (Coaching) (73 Points)
Replied 21 August 2011

Vaibhav

thanks...but as per sec 224(1B) ceiling of audits they have written that a full time employee will not get any companies for audit and the other pertners will get their 20 companies in the name of the firm.They havent mentioned that the firm gets disqualified, so what the interpretation should be done.?And henceforth all the case laws have been solved in past examinations on the same basis not considering that particular's parters companies

Sumit

thanks ,,,but i havent heard about part time COP....what is it?