AUDITOR OF JOINT STOCK COMPANIES-QUALIFICATION,DISQUALIFICATION.pptx

AUDITOR OF JOINT STOCK COMPANIES

1. AUDITOR OF JOINT STOCK COMPANIES QUALIFICATION DISQUALIFICATION

2. Definition of Auditor An auditor is a professional who examines and verifies the financial records of a company. In the case of joint-stock companies, auditors ensure the accuracy and fairness of financial reporting. Types of auditors: Internal and External

3. Qualification of an Auditor Educational Requirements : Chartered Accountant (CA) Cost Accountant (CMA) Company Secretary (CS) Other professional qualifications as recognized by law

4. Qualification - Experience Minimum years of professional experience (e.g., 3–5 years in auditing) Practical knowledge in financial auditing and accounting Familiarity with laws and regulations governing joint-stock companies

5. Qualification - Legal and Regulatory Requirements Must be in good standing with the regulatory authority (e.g., ICAI for CA in India) Comply with the rules and ethics set by auditing standards and the professional body Must not be an employee of the company or have any direct financial interest in the company

6. Disqualification of an Auditor Conflict of Interest : If the auditor has financial interest in the company being audited Personal Relationships : If there is a close relationship with any director or employee of the company Not Following Ethical Standards : Violating professional ethics and regulatory guidelines

7. Specific Disqualifications (Legal Grounds) Section 141 of Companies Act (India) : A person is disqualified if they are an officer or employee of the company If they are a partner or employee of the company’s auditor If they are a debtor or creditor of the company If they have certain criminal convictions or are under investigation for financial misconduct

8. Disqualification Based on Relationship If an auditor is a relative (e.g., spouse, child) of the company’s key management personnel or directors If the auditor has been a director or employee of the company in the past Any relationships that may compromise auditor independence

9. Disqualification for Non-Compliance If the auditor fails to submit financial statements or audits on time Fails to meet the professional qualifications and standards of their regulatory body Lack of integrity or consistent violation of professional ethics

10. Consequences of Disqualification Removal of the auditor from their position Legal and financial penalties for the auditor and company Damage to the reputation and credibility of the company’s financial statements Auditors may face disciplinary action from the professional regulatory body