Eligibility, qualification and disqualification of Auditors – Section 141 corresponding to section 224, 226 of Companies Act 1956. Section 141(3)(g) provides that a Chartered Accountant in Practice cannot be appointed as an auditor of more than 20 (Twenty) Companies. The extract of the Section is reproduced below :
“ 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 person or partner is at the date of such appointment or reappointment holding appointment as auditor of more than twenty companies.”
Section 141(4) provides when a person appointed as an auditor of a company, incurs any of the disqualifications mentioned in subsection (3) after his appointment, he shall vacate his office as an auditor and such vacancy shall be deemed to be a casual vacancy in the office of the auditor. The extract of the section is reproduced below :
“when a person appointed as an auditor of a company incurs any of the disqualifications mentioned in sub-section (3) after his appointment, he shall vacate his office as such auditor and such vacation shall be deemed to be a casual vacancy in the office of the auditor.”
Now the question that arises is when a Chartered Accountant who was appointed prior to 30-09-2013 for the year ended 31-03-2013, whether the provisions of section 141(3) disqualification will attract or not .