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Ronika Maheshwari asked 1 month ago

Can a Director of Subsidiary company audit a Holding Company? Yes/No with relevant section reference.

1 Answers
RaviRavi Staff answered 1 month ago

Sec 141(3) (b) says officer or employee cannot become auditor of the company
officer includes director
they prohibit only officers or employee’s of “that” company
that means above persons from holding or subsidiary can become auditor, this is loop hole
ICAI Ethical Standard Board said director of holding and auditor of subsidiary cannot be same
https://www.icai.org/post/whether-the-auditor-of-a-subsidiary-company-can-be-a-director-of-its-holding-company#:~:text=In%20view%20of%20the%20above,the%20independence%20of%20an%20auditor.
they are silent about whether auditor of holding and can be director at subsidiary
so legally there is no prohibition regarding this point
but still in practical life CA’s should be careful and check new code of ethics before accepting such assignments 

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