Explain on disqualifications for appointment of auditors of a company?

Auditing and Assurance Revision Questions and Answers

Answer: As per Sec 112(1) of Companies Act 2063,
None of the following 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:

(a) A director, advisor appointed with entitlement to regular remuneration or cash benefit, a person or employee or worker involved in the management of the company or a partner of any of them or an employee of any of such partners or a close relative of a director or partner, out of them, or an employee of such relative;

(b) A debtor who has borrowed moneys from the company in any manner, or a person who has failed to pay any dues payable to the company within the time limit and is in such arrears or close relative of such person;

(c) A person who has been sentenced to punishment for an offense pertaining to audit and a period of five years has not elapsed thereafter;

(d) A person who has been declared insolvent;

(e) A 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;

(f) A person who has been sentenced to punishment for an offense of corruption, fraud or a criminal offense involving moral turpitude and a period of five years has not elapsed thereafter;

(g) A person referred to in Sub-section (3) of Section 111;

(h) In the case of a public company , any person who works, whether full time or part time , for any governmental body or anybody owned fully or partly the Government of Nepal or any other company or a partner of such person or a person who is working as an employee of such partner or a person who is authorized to sign any documents or reports to be prepared the management of the company;

(i) A company or corporate body with limited liability;

(j) A person having interest in any transaction with the company or his/her close relative or a director, officer or substantial shareholder of another company having any interest in any transaction with the company.



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