Question

Comment on the following

a) a director over dinner at home examines the financial statements of the company with
the help of his brother who is a Chartered Accountant so as to prepare for the board
meeting next day
b) The promoter, retired from the board wants prior information and involvement in board
decisions.
d) An employee who inſorms the CEO of malpractices is fired stating incompetence.​

Answer 1

Answer:

. Introduction

Section 141(3)(i) of the Companies Act, 2013 states any person whose subsidiary or associate company or any other form of entity, is engaged as on the date of appointment in consulting and specialised services as restricted for statutory auditors in section 144, shall be disqualified for appointment as auditor of a company.

1.1. Restricted services for statutory auditors: An auditor shall provide to the company only such services as are approved by the Board of Directors or the audit committee, as the case may be. However, as per section 144 auditors cannot provide following services “directly or indirectly” to the company or its holding company or subsidiary company, namely:—

(a) accounting and book keeping services;

(b) internal audit;

(c) design and implementation of any financial information system;

(d) actuarial services;