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liability of a ca firm

prateek (CA Final) (355 Points)

29 June 2010

what is the liability of a ca firm, in case of audit & sign by a partner of the audit firm?

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Rahul Gupta (Project Controller ACA MBA(Fin.)) (8019 Points)
Replied 29 June 2010

The firm is liable through his partners only and the partners will be held of guilty and accordingly penalized.

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prateek (CA Final) (355 Points)
Replied 29 June 2010

is dis mean dat d partner whu is signing d balance sheet will only be held liable and not d other partners of the CA firm?

Rahul Gupta (Project Controller ACA MBA(Fin.)) (8019 Points)
Replied 29 June 2010

No its not the case. For every audit, the partner who is considering the audit is the main incharge. However, if any wrong thing is done by that partner, then he is liable to the firm i.e the other partners.

Regarding, CA Misconduct, the Partner who is the main auditor in the wrong doing, is held to be guilty of misconduct along with the other consented partners to the act, and ICAI can levy penalties on firm as well as on the partners

Further, in case any penalty is levied on the firm because of the wrong doing, then the guilty partners are liable to compensate the loss to the firm as per the partnership deed.

In Nut shell, every partner who is aware of the wrong doing and has asserted to it, will be held liable as guilty.

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DEEPIKA GOEL (C.A) (419 Points)
Replied 29 June 2010

As we hv studied the liability of firms is unlimited. Firstly the partner will be held guilty and if any recovery is to be done, it will be recovered frm him but if he is not able to repay this obligations, the recovery can be made from other partners too...... Its not d case of company where the liability is limited to the extent of unpaid share capital......dats y now a days, a new concept of Limited liability concept where liability is limited and rules and regulations are not so strict......as in case of company....

prateek (CA Final) (355 Points)
Replied 30 June 2010

okkk thnx guys.....nd miss deepika are u talking abt d principal agent relationship in a partnership

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DEEPIKA GOEL (C.A) (419 Points)
Replied 01 July 2010

no.....i m not talking about the principal agent relationship....i am talking about the limited liability partnership ....its new form to create the organisation just like company or firm. Limited Liability Partnership includes the features of the both company and firm. For further details you can refer this link.....www.llp.gov.in

prateek (CA Final) (355 Points)
Replied 01 July 2010

okkk thnx guys.....

Anup (owner) (22 Points)
Replied 18 April 2011

if a C.A. firm has signed the bank audit and if some wrong thing has been done and RBI has stopped the working of Bank. later on RBI has filed the criminal case against all the bank officials including against signing Partner/auditor of the bank. in this case all the major decisions has been taken by signing partner and other partner has done only routine audit/checking like the other staff of the audit firm. in this criminal case other partner of the firm is how much liabile/responsible .