Can a son do audit of his father books?
Is it not possible to do so or the same can be mentioned in Audit report?
CA. Prashanth Kumar Jain
(Chartered Accountant)
(68 Points)
Replied 14 November 2008
since there is direct relation between the auditor and auditee independence of auditor can not be ensured. Hence auditor must avoid the acceptance as auditor
Rakesh Parmar
(Practice)
(70 Points)
Replied 14 November 2008
Is that true ??? and if u r sure tell me whr its written(in any book) because i knw one CA doing tax audit of his dad.
vijay
(student)
(24 Points)
Replied 21 November 2008
According to the Chartered Accountants Act, 1949, a professional and practising chartered accountant cannot express an opinion on the financial statements of an enterprise, in which his relatives have a substantial interest unless he discloses such interest in his audit report.
Here the term "relative" has the same meaning as it is defined in the Companies Act, 1956. And similarly, the term "Substantial Interest" has the same meaning as it is defined under the income-tax act, 1961.
As per the companies Act, 1956 the term Relative includes Father also.
Therefore, a son can do the audit of his father's books of accounts provided he discloses the fact in his audit report.
CA. Dashrath Maheshwari
(TaXpert)
(15103 Points)
Replied 10 June 2009
as per recent clarifications given by the ICAI, a CA can not audit his direct relatives business.
https://www.icai.org/resource_file/11449p752-757.pdf
Amol Gopal Kabra (CA,CS,DISA)
(Practicing CA)
(8539 Points)
Replied 13 June 2009
| Originally posted by :vijay | ||
| " | According to the Chartered Accountants Act, 1949, a professional and practising chartered accountant cannot express an opinion on the financial statements of an enterprise, in which his relatives have a substantial interest unless he discloses such interest in his audit report. Here the term "relative" has the same meaning as it is defined in the Companies Act, 1956. And similarly, the term "Substantial Interest" has the same meaning as it is defined under the income-tax act, 1961. As per the companies Act, 1956 the term Relative includes Father also. Therefore, a son can do the audit of his father's books of accounts provided he discloses the fact in his audit report. |
" |
Earlier it was allowed after giving a specific disclosure obout the relation. However, ICAI has ammended the regulation whereby a chartered accountant cannot audit the books of accounts of his relatives.
CA Devanshi Gandhi (Ajani)
(FCA DISA Mcom CIFRS & LLB)
(9058 Points)
Replied 09 July 2009
he can not do
nipon
(Article Assistant)
(70 Points)
Replied 15 July 2009
No, an auditor can not be a relative of his client.
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