Auditing and assurance revision question and answer

Auditing and Assurance Revision Questions and Answers

Express your comments/views on the following situation
a) Puran (A practicing Chartered Accountant) has been appointed as statutory auditor of ABC Development Bank Limited for the fiscal year 2068/69. Puran has been holding certain paid up share capital of the bank since the year 2060. Is the appointment of Puran is valid?
Section 112 of the Companies Act, 2063 stated the disqualifications of auditor: As per Act None of the certain persons or the firms or companies in which such persons are partners shall be qualified for appointment as auditor and shall, despite appointment as auditor, continue to hold office.

Provision regarding appointing shareholder as auditor as per Companies Act stated that: persons or the firms or companies who is substantial shareholder of the company or a shareholder holding one percent or more of the paid up capital of the company or his close relative cannot be appointed as auditor.
In the instance case the % of holding paid up capital is not mentioned, if the Puran himself or firm or company he is partner or shareholder or his close relative do not hold one percent or more than one percent of the paid up capital of ABC Development Bank Limited only than Puran is qualified to be appointed as auditor.

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