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Saksham Agrawal asked 1 month ago

Sir, 

My query is regarding the rotation of auditor u/s 139(2), which is as follows:

1. As per section 139(2), no audit firm would be eligible to be appointed as an auditor if the partner of the audit firm whose tenure has expired is also a partner in that firm. But if on the date of appointed there was no common partner and subsequent to the appointment the partner of the previous audit firm becomes the partner of the newly appointed audit firm, will this appointment will still be valid?.
2. And if yes, isn’t this a loophole? 

A similar question was also asked in the examination of “May-17”,  I am attaching the relevant question for your kind reference in the form of Google Drive link. 

Thank you for your time. 

Doubt question
 
 

1 Answers
RaviRavi Staff answered 1 month ago
  1. Yes it is allowed to have common partner situation after date of appointment, law’s intention is to stop these things when change of auditors happen, if latter on such situation arises they are absolutely fine. You can call it is loop hole, in practical world once you give things to others it is difficult to take it back.
  2. Now in icai question you have to see whether partner who is joining new firm is continuing with old firm, if yes its common partner situation, if no then its leaving old firm and joining new firm answer will change accordingly, icai generally assumes common partner situation.

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