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Sayli soniSayli soni asked 12 months ago

as per disqualification provisions for auditor, an auditor cannot accept the appointment if he has business relationship with the company.
Does this business relationship includes in indetness within its meaning?
For example- if Mr A took a loan from company xyz of rupees 400000 then can he be appointed as an auditor of company or will he become disqualified because of existence of business relationship ?

1 Answers
RaviRavi Staff answered 12 months ago

business relationship means doing commercial purpose (for doing business) transaction, it can be buying, selling or taking loan for business etc  

indebtedness can arise because of business or personal transaction  

indebtedness due to commercial purpose transaction, will immediately attract disqualification because of business relationship  

indebtedness due to personal purpose transaction is allowed till 5,00,000 limit     

so both are different  

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