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Disqualification of Auditor

Saliq Ansari (CA_Final Student) (885 Points)

25 January 2010

What will be the Consequences if an Partner of Auditor's firm sign a Bal Sht of a Listed Company

(i) Unknowing the fact that one of the other partners helds share of that company.

(ii) Knowing the fact that one of the other partners helds share of that company.

Kindly clarify with relevant case laws if any.

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7 Replies

CA.G.Muguntha Narayanan (Internal Auditor at TVS Motors) (2195 Points)
Replied 25 January 2010

it amounts to prof. misconduct in both the cases

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CA Dhiraj Ramchandani (CA, M. com) (10823 Points)
Replied 25 January 2010

Innocence of such fact cannot be considered as valid reason....

So, in both the cases it will be considered as MISCONDUCT only

CourseCart.in (Mentor at SHAYVIDZ Academy) (3756 Points)
Replied 25 January 2010

Agree wid Learned members... it is misconduct n cannot be excused..

Ankur Garg (Company Secretary and Compliance Officer) (114773 Points)
Replied 25 January 2010

Hi,

Your problem is governed by section 226(3))(e).

By virtue of section 226(5) this is the case of deemed vacation of office. So at the time of signing of balance sheet CA firm was actually not the statutory auditor of the company. This may be considered as a defence against the professional misconduct. No knowledge of the act / holding of other partner may also be considered as a defence against the professional misconduct.

Regards

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CA LOVELY ARORA (C.A. B.Com (H) Graduate) (2151 Points)
Replied 25 January 2010

but ankur garg, it is against general tendency......... can it be true that you don't know that you or your firm or your partner is disqualified from audit........ it is looking that it is not professional misconduct........... but the reason should not be that partner didn't know about that............. May be you true......... but please justify your answer...........