KBC & Co. a firm of Chartered Accountants has three partners, namely, Mr. K, Mr. B &Mr. C. …
KBC & Co. a firm of Chartered Accountants has three partners, namely, Mr. K, Mr. B &Mr. C. Mr. K is also in whole time employment elsewhere and Mr. B & Mr. C. do not holdany audits in their personal capacity or as partners of other firms. The firm is offered the audit of a public company ‘ABC Ltd.’ and is already holding audit of 40 companies.
To be precisely clear, consider these words from section 141 of the companies act, 2013
Sec 141. The following persons shall not be eligible for appointment as an auditor of a company, namely:
g. 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;
Analyzing the situation where a chartered accountant is allowed 20 clients if he is not employed full time elsewhere. This means Mr. K is not eligible, and Mr C and K get 20 audits each.
Hence the company can not accept the audit of the said public company as it shall exceed their client limit of 20 clients each.
