Query in 'audit amendment notes'

Yogesh Shah (Managing Corporate Finance)   (1051 Points)

10 February 2012  

Hi Friends,

 

I read the pdf file of 'amendments in Audit - applicable for May 2012 attempt' uploaded by caclubindia member 'Aseem'  (has done a great job)

 

I didn't get one particular para which was mentioned in that file, which is read as under :-

 

The Committee  on  Ethical  Standards,  decided  that  it is  not  permissible for  a member who has been Director of a Company, upon resignation from the Company to be appointed as an auditor of the said Company, and the cooling period for the same may be 2 years

 

Can anyone explain me what it exactly is?