Sec 139(2) and Its Rules Specify that
1. if signing partner leaves the firm and joins any firm then that firm will be ineligible for appointment and cooling period will be applicable to them also.
2. if partner of firm under rotation and new firm are common then also new firm becomes in eligible, but here common partner situation should be seen at the time of appointment.
so leaving is covered in 1st point and common partner situation in 2nd point
In first case we have to see this condition on the date of appointment after that
In second case we have to see this condition only at the time of appointment
My query is not resolved. Please provide clear cut answer. This is not the case as explained in the answer provided.
After appointment of new firm, the signing partner of erstwhile auditor firm joins the new firm, then how cooling period would apply?
Rule – 6, Companies (Audit and Auditors) Rules, 2014
Manner of rotation of auditors by the companies on expiry of their term
Sub Rule 3
if a partner, who is in charge of an audit firm and also certifies the financial statements of the company, retires from the said firm and joins another firm of chartered accountants, such other firm shall also be ineligible to be appointed for a period of five years.
From above as said earlier, new firm will become ineligible and cooling period will be applicable. Here they have not mentioned that you have to see this as on date of appointment. That means if such joining happens any time , cooling period will get attracted.
On the other hand in case of common partner situation
Sec 139 (2)
Provided further that as on the date of appointment no audit firm having a common partner or partners to the other audit firm, whose tenure has expired in a company immediately preceding the financial year, shall be appointed as auditor of the same company for a period of five years
Now here we have to see common partner situation as on date of appointment, as it is specifically mentioned.
I hope you got the difference and answer also.
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