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Internal auditor

Srikanth D (Occupied.) (168 Points)

17 March 2013

Can a Director of Subsidiary company act as Internal Auditor for its Holding Company?

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13 Replies

CA Anushree jain (CA) (1531 Points)
Replied 17 March 2013

no he can not as per my knowledge

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deepali agarwal (Company Secretary) (1289 Points)
Replied 17 March 2013

No as he has interest in the Holding company...

Kumar A. Ranjan (Student) (1588 Points)
Replied 18 March 2013

No, a director of a Subsidiary company can not Act as a Internal or Statutory Auditor of its Holding Company.

CA BARKHA MITTAL (B.COM, CA) (149 Points)
Replied 18 March 2013

CA Suryakant Dubey (CA ) (931 Points)
Replied 18 March 2013

Reporting responsibilty in case of internal audit is to be done to Director by Internal auditor, It sounds different as director is auditing for himself, Hence director cannot be act as a auditor for the same companny....!!!!!!

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CA Suryakant Dubey (CA ) (931 Points)
Replied 18 March 2013

refer https://icai.org/post.html?post_id=1442

Srikanth D (Occupied.) (168 Points)
Replied 24 March 2013

Originally posted by : Suryakant Dubey
	refer https://icai.org/post.html?post_id=1442

does 'Auditor' in that paragraph[in the link] also mean Internal Auditor ?

Subramani (Employed) (198 Points)
Replied 01 June 2013

He cannot (as it compromises his independence), as per the above post

Srikanth D (Occupied.) (168 Points)
Replied 02 June 2013

Originally posted by : subramani
	He cannot (as it compromises his independence), as per the above post

The last line in the paragraph in the above link is ''. In view of the above the Committee has decided that the auditor of a Subsidiary Company can’t be a Director of its Holding Company, as it will affect the independence of an auditor'' .

What I am asking is reverse of it - can director of a Subsidiary company act as auditor for Holding company. And holding company may have interest on subsidiary company and not vice versa.

CA Anushree jain (CA) (1531 Points)
Replied 03 June 2013

no director of subsidiary company can not be auditor of holding company

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Srikanth D (Occupied.) (168 Points)
Replied 04 June 2013

Originally posted by : Anushree
	no director of subsidiary company can not be auditor of holding company

I am talking only in the case of Internal Auditor, not Statutory.

It would be nice if you offer some explanation.

CA Mahesh (CA) (175 Points)
Replied 28 June 2013

Is there any Section reference ??? Employee can become an Internal auditor then why not Director ??

Akshata (CA Final ) (324 Points)
Replied 06 July 2013

Hi Raju

As per my understanding , The Internal Auditor u r speaking of and the internal auditor srikanth is speaking of are different.

U r talking about Internal auditors who are part of company itself (employees) which the company appoints for smooth functioning and srikanth is asking about Internal Auditors to be appointed according to the Act.

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