1. As per Sec 141(3), CA who is Officer or Employee of the Company is disqualified from doing Audit of Companies. But we have already studied that those CA in practice can only carry out audit then there is no use of this disqualification, right?………………………. 2. Similarly a CA can either do business or be in practice. then how come CA jointly does Business with other Co. (i.e. having business relationship with that Co), and then be disqualified u/s 141(3)?……………………….. 3. U/s 144, please explain meaning of Investment Advisory Services & Outsourcing of Financial Services…………………. 4. Also, plz explain meaning of Directly/Indirectly in case of Audit firm which is given immediately after Prohibited services u/s 144.

5 answers

Ravi Staff April 21, 2018

Business Relationship = Any Commercial Transactions = For doing further earning activity 
As stationary will be for Office, used for profession to earn, it is commercial transaction and hence business Relationship
Auditor cannot have business relations with client and it is not covered in exceptions sonot is not allowed , limit of 5,00,000 is not relevant in this case .
Investment Banking in short  means helping to buy and sell business .
Investment Advisory is giving advice for where to invest surplus money 
Firm includes LLP , it is a body corporate , body corporate if holds more than 50 % will be called holding and similarly subsidiary
It simply means firms controlling us are holding and firms we are controlling are subsidiary

Ravi Staff April 20, 2018

1. CA in practice can do job , that is possible in some circumstances which we study in ca final professional ethics chapter , so it’s possible that job and COP co exist.
2. Business relationship means any commercial transactions , renting office , buying office stationary is also covered. 
3. Investment Advisory = Advicing people where to invest money.
Outsourced financial services = taking responsibility to arrange finance for company whenever required in best possible terms.
4. Indirectly covers giving services through relatives , company where ca has control and significant influence , through a firm with same brand name , throught connected person etc


So, as per Ans 2., Auditor of Navneet Notebooks cannot purchase Stationery from his client whether by cash or on credit upto Rs. 5 Lakhs?
3. Then what’s the difference between Investment Banking Service and Investment Advisory Service?
In question 4., Sir, I’m not able to understand Parent/Subsidiary/Associate in case of P’ship Firm.

Ravi Staff April 21, 2018

Please ask seperate question everytime you as query 🙂
You get email when query is answered.


Ok sir
Thank you so much for detailed answer. Quite surprised about Navneet’s answer.


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