ABC & Co, Chartered Accountants acquired a Laptop worth Rs 57,000 from Sheetal Electronics(Firm) who also happen to be their auditee client. The payment is yet to be made. Can ABC & Co, act as auditors of Sheeta Electronics, while the payment is still due??
4 Replies
Devendra
(Chartered Accountant)
(4775 Points)
Replied 13 May 2010
According to section 226(3)(d) , if a person is indebted with an amount exceeding Rs. 1000 or has given security in connection to the indebtedness then the appointment of such person as an auditor is void. In your case, the person is indebted with an amount of Rs. 57000, so his appointment is invalid.
Thank You :)
Somaas Kandan
(CA Final)
(385 Points)
Replied 14 May 2010
Yes, they can act as an Auditor of Sheetal electronics this year i.e upto AGM, b'coz at the time of their appointment in the last year AGM, they are not debtor in that firm. But they cannot reappoint as an auditor in this AGM, if they still be a debtor.
please forgive me if my answer is wrong.
Recent Topics
- Urgent doubt on GST
- Profit or Loss on Sale of Assets Accounting treatm
- Clarification on RCM on Rent Payment for QRMP Deal
- Reclaimed itc in gstr9
- Gamification in Accounting Software: Boosting Enga
- I want to knw Hsn code and gst rate of resin produ
- Schedule FA clarification
- Income tax on freelance income from crypto
- ITC temporary reversal and reclaim
- Query on Transactions
Related Threads
CAclubindia
