ICAI Notification

[Indrani Sanka]

Hi,

Does any one have the notification given by the ICAI institute specifying the number of companies in which a firm / person can act as a statutory auditor?

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Regards,

Indrani

[c.n. krishnan]

This is governed by Companies act. only tax audit ceiling is governed by ICAI, which is 60 (as against 45) per partner/person.

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[Madhur Agrawal]

ICAI also has set limit for number of audits. The Act excludes private companies from the total audit limit, whereas the ICAI code of conduct includes it.

[c.n. krishnan]

Please refer 224 (1B and C). There is no mention of exclusion of pvt cos. That exemption is available for directorships.

[Madhur Agrawal]

Refer Chapter VIII of Council Guidelines No.1-CA(7)/02/2008,FOR THE MEMBERS OF ICAI. Extract provided below;

Chapter VIII

Specified number of audit assignments

8.0 A member of the Institute in practice shall not hold at any time appointment of more than the “specified number of audit assignments” of Companies under Section 224 and/or Section 228 of the Companies Act, 1956.

Provided that in the case of a firm of Chartered Accountants in practice, the “specified number of audit assignments” shall be construed as the specific number of audit assignments for every partner of the firm.

Provided further that where any partner of the firm of Chartered Accountants in practice is also a partner of any other firm or firms of Chartered Accountants in practice, the number of audit assignments which may be taken for all the firms together in relation to such partner shall not exceed the “specified number of audit assignments” in the aggregate.

Provided further where any partner of a firm or firms of Chartered Accountants in practice accepts one or more audit of Companies in his individual capacity, or in the name of his proprietary firm, the total number of such assignments which may be accepted by all firms in relation to such Chartered Accountant and by him shall not exceed the “specified number of audit assignments” in the aggregate.

8.1 Explanation:

For the above purpose, the “specified number of audit assignments” means –

      (a)  in the case of a Chartered Accountant in practice or a proprietary firm of Chartered Accountant, thirty audit assignments whether in respect of private Companies or other Companies.

      (b)  in the case of Chartered Accountants in practice, thirty audit assignments per partner in the firm, whether in respect of private Companies or other Companies.

Provided that out of such “specified number of audit assignments, the number of           audit assignments of public Companies each of which has a paid-up share capital of rupees twenty-five lakhs or more, shall not exceed ten.

8.2 In computing the “specified number of audit assignments”-

      (a)  the number of audit of such Companies, which he or any partner of his firm has accepted whether singly or in combination with any other Chartered Accountant in practice or firm of such Chartered Accountants, shall be taken into account.

      (b)  the audit of the head office and branch offices of a Company by one Chartered Accountant or firm of such Chartered Accountants in practice shall be regarded as one audit assignment.

      (c)  the audit of one or more branches of the same Company by one Chartered Accountant in practice or by firm of Chartered Accountants in practice in which he is a partner shall be construed as one audit assignment only.

      (d)  the number of partners of a firm on the date of acceptance of audit assignment shall be taken into account.

8.3 A Chartered Accountant in practice, whether in full-time or part-time employment elsewhere, shall not be counted for the purpose of determination of “specified number of audit of Companies” by firms of Chartered Accountants.

8.4 A Chartered Accountant being a part time practicing partner of a firm shall not be taken into account for the purpose of reckoning the audit assignments of the firm.

http://esb.icai.org/?page_id=136

[Indrani Sanka]

HI,

would the statutory auditor be liable in case of any consequences arising, on him denying to give a declaration in this regard

Regards,

Indrani

[Madhur Agrawal]

Yes you may ask about the declaration from the Auditor, and if he dont provide, you can make complaint with the ICAI.