As per company’s act Sec 141(3) director of holding / subsidiary / associate are not disqualified to do audit of company, which is a loop hole in company’s act. But ICAI has plugged one loop hole as per ICAI announcement Director of holding company cannot do audit of company so this one loop hole is plugged.
but in your case auditor is director of subsidiary and wants to audit of holding so technically it is allowed
sir Bt as par SA200 ethical requirement audit should be independent… here he can’t maintain independence hence he should not accept appointment.
As per Co Act and CA Act it is absolutely fine
now SA 200 is principle based, what is not independent apart from what is given in law is based on judgement and is subjective
so we have to answer allowed as per law but auditor should be careful and apply his judgement