State the Qualifications and Disqualifications of the Auditor of the Company?
Qualifications of Company Auditor.
The qualifications of the Company Auditor are given in Sec. 226(1) and (2) of the Companies Act. It ensures that only a qualified person possessing the requisite professional knowledge and technical skills is appointed as an auditor.
Chartered Accountant in Practice: A Chartered Accountant is a person who is a member of the Institute of Chartered Accountants of India. A person shall not be qualified for appointment as auditor of a company unless he is a Chartered Accountant within the meaning of Chartered Accountants Act, 1949.
Certified Auditor: A person who holds a certificate when the Restricted Auditor’s Certificate (Part B) is also qualified to act as an auditor of a company. State of Indian Union can also be appointed as an auditor of the company registered anywhere in India. Such persons are known as Certified Auditors and are always subject to the rules made in this behalf by the Central Government.
Dis-Qualifications of Company Auditor.
The disqualifications of a Company Auditor are that according to. Sec. 226(3) the following persons are debarred from being appointed as auditors of a company: a body corporate, an officer or employee of the company, a person who is a partner or who in the employment as an officer or employee of the company, a person who is indebted to the company for an amount more than 1000 rupees,
Or who has given any guarantee or provided any security in connection with the indebtedness of any third person to the company for the amount exceeding 1000 rupees, or if he is disqualified for appointment, under any of the above four clauses, as auditor of anybody corporate which is that company’s subsidiary or its holding company or subsidiary of the holding company or would be so disqualified if the body corporate were a company. If an auditor becomes subject, after his appointment, to any of the disqualification specified above, he shall deemed to have vacated his office.
