Auditing and assurance revision question and answer

Auditing and Assurance Revision Questions and Answers

Ramu & Co. had conducted the audit of XYZ Limited for the financial years 2067/68, 2068/69 and 2069/70. CA. Raman Saha, partner of Ramu & Co, left the firm on 1 Baishakh 2069. CA. Raman Saha has been appointed as the auditor of XYZ limited for the year 2070/71.
As per section 111(3) of the Companies Act, no auditor or his/her partner or ex-partner or employee or ex-employee shall be appointed as auditor for more than three consecutive terms to perform the audit of a public company. Provided, however, that this restriction shall not apply to any partner who ended partnership or any employee who left the service of such auditor three years before.
In the present case, Ramu & Co has been auditor of XYZ Ltd for three consecutive years till 2069/70. Since Raman Saha is the ex-partner of Ramu & Co and 3 years has not elapsed from the date of ending his partnership with Ramu & Co (as date of separation being 1 Baisakh 2069), his appointment as auditor of the company for the year 2070/71 cannot be considered as lawful.

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