Question

Which of the following shall NOT be eligible for appointment as an auditor of a company as per Section 141(3) of the Companies Act, 2013?
(I) A body corporate
(II) Limited liability partnership
(III) An officer of the company
(IV) An employee of the company
(V) A person who is a partner of an officer or employee of the company
(VI) A person who is in the employment of an officer or employee of the company
(VII) A person who is indebted to the company in excess of Rs.2 Lakhs but below Rs. 5 lakhs
The correct answer is -

• A. (I), (II), (III), (IV), (V)& (VI)
• B. (I), (II), (III), (IV) & (VII)
• C. (II), (III) & (VII)
• D. (I), (III), (IV), (V) & (VI)

Answer 1

The correct option is D (I), (III), (IV), (V) & (VI)

Following person/s shall not be eligible for appointment as an auditor if he, or his relative or partner —

(i) is holding any security of or interest in the company or its subsidiary, or

of its holding or associate company or a subsidiary of such holding company:

Provided that the relative may hold security or interest in the company of

face value not exceeding one thousand rupees or such sum as may be prescribed;

(ii) is indebted to the company, or its subsidiary, or its holding or associate

company or a subsidiary of such holding company, in excess of such amount as

may be prescribed; or

(iii) has given a guarantee or provided any security in connection with the

indebtedness of any third person to the company, or its subsidiary, or its holding

or associate company or a subsidiary of such holding company, for such amount

as may be prescribed