Appointment accepted before 1/4/2014 for more than 20 Cos valid, but donot accept appointment from 1/4/2014 if already holding 20 Cos Audit: CA Nitesh More
1) As per Section 141(3)(g), which is applicable from 1/4/2014,the
following persons shall not be eligible for appointment as an auditor
of a company, namely:--a person who is in full time employment
elsewhere or a person or a partner of a firm holding appointment as
its auditor, if such persons or partner is at the date of such
appointment or reappointment holding appointment as auditor of more
than twenty companies;
2) As per General Circular 08/2014, the financial statements (and
documents required to be attached thereto), auditors report and Board
report in respect of financial years that commenced earlier than 1st
April, 2014 shall be governed by the relevant provisions/ Schedules/
rules of the Companies Act, 1956 and that in respect of financial
years commencing on or after 1* April, 2014, the provisions of the new
Act shall apply.
3) My comments: Although audit report in respect of financial years
that commenced earlier than 1st April, 2014 shall be governed by the
relevant provisions/ Schedules/ rules of the Companies Act, 1956, a
person shall not be eligible for appointment as an auditor of a
company, if he holds appointment of more than 20 companies on or after
1/4/2014. There is no relaxation for disqualification of auditor u/s
141 in this circular.
4) Kindly note that those who have already appointed under Companies
Act, 1956 for more than 20 companies can continue. However, he cannot
accept appointment from 1/4/2014 if he is at the date of such
appointment or reappointment holding appointment as auditor of more
than twenty companies
5) However, I expect some relaxation as promised by MCA in 1-2 months
as promised :
The Ministry of Corporate Affairs today said efforts are being made to
resolve difficulties faced by various professional entities, including
company secretaries and auditors, with regard to new companies law.
There have been discontent in some quarters related to certain rules
under the new Companies Act. Most provisions of the new legislation
came into effect from April 1.
"Auditors, company secretaries and cost accountants will have to
re-invent themselves if they are to discharge responsibilities
entrusted to them under the new law...," M J Joseph, who is the
Additional Secretary at the Ministry, said here.
He also assured that the Ministry would effectively deal with
difficulties they face and "resolve such issues at the earliest".
"We are in discussions and dialogues to address the issues," he said
while speaking at a conference.
Earlier this month, members of the Institute of Company Secretaries of
India (ICSI) had staged protest demanding changes pertaining to their
profession in the new legislation.
As per the notified rules, public companies with paid up capital of up
to Rs 10 crore as well as all private firms have been exempted from
having a company secretary. In the draft rules, the threshold was kept
at Rs 5 crore or more.
ICSI had also demanded that secretarial audit should be made
applicable to those "companies which are at least subject to internal
audit".
Meanwhile, there have been apprehensions about rotation of auditors at
companies while many sectors have been excluded from the ambit of cost
audit.
--
Warm Regards
*"Team" CA.Nitesh More* | FCA, |
Visit our blog: caniteshmore.blogspot.com
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