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Diksha JhawarDiksha Jhawar asked 3 years ago
1 Answers
RaviRavi Staff answered 3 years ago

INCUMBENTS2                                                Council Guide line 2008

I – Indebtedness

CA will be disqualified to become auditor if he is Indebted or given guarantee / security to Entity for amount exceeding limit fixed in law and in other cases 10,000
Company Audit à 5,00,000
Tax AuditàZero
Vat Audit / Internal Audits and Other Auditsà10,000

N- Number of Audits

It still contains old limit of 30. So combined interpretation with company actà limit of 20 excluding 4 type of companies and limit of 30 including 4 type of companies.
Use above interpretation if question specifies council guidelines else stick to 20.
4 type of companiesà OPC / Small / Dormant / Private Companies having paid up capital less than 100 crores

C- Cost Auditor

Statutory Auditor should not accept post of Cost Auditor. This point is covered in Companies Act 2013

U- Unjustified Removal of Auditor

Follow directions given by council / committee / given to Incoming Auditor, to not to accept appointment if there is unjustified removal of earlier auditor.

M-Minimum Audit Fees

This section is repealed from 8th June 2011. So there is no minimum or maximum audit fees.
In suggested answers it was mentioned that such limits are recommendatory which is inappropriate.

B- Books of Accounts

CA in practice shall maintain proper book including CASH Book & Ledger.

E- CA Employee

CA who is employee shall apply due diligence and shall not be gross negligent in conduct of his duties.

N-Non Payment of Undisputed Fees

Dont accept assignment if undisputed audit fees of earlier statutory auditor is not paid. (Not Applicable in Case of Sick Unit)
Audit fee in accounts signed by both auditee & auditor shall be considered as “undisputed” audit fee
“sick unit” shall mean where the net worth is negative

T-Tax Audit Limit

–Tax Audit Limit is 60 –Limit of one partner can be used by another
–Limit of Firm 60 X Number of Partners –Part Time – Full Time Employment Limit will be Zero –Part Time COP Limit will be Zero — 2 or more branches of same entity will be counted as one –HO & branches will be counted as one –Tax audit where income is not charged on presumptive basis is not included

S-Substantial Interest

CA should not express opinion where one or more relatives are having substantial interest (20% or more) Clause 4 covers only percentage holding of partners, regarding relative is specified in council guidelines 2008.

S-Statutory Auditor

CA  in practice shall not accept the appointment as statutory auditor of PSU/ Govt Com/ Listed Com and other Public Com having turnover of Rs. 50 cr or more in a year where he accepts any other work(s) or assignment(s) or service(s) in regard to the same Undertaking(s)/ Company(ies) on a remuneration which in total exceeds the fee payable for carrying out the statutory audit of the same Undertaking/company.
Calculation should be done for whole group and fees of associate concerns should also be included.

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