Guidelines by Ethical Standard Board on number of tax audits and company audits permissible for a member in practice (Central Council Guidelines)

Tax Audits under section 44AB of the Income Tax Act 1961

·         Not to accept in a financial year, more than the “specified number of tax audit assignments” i.e. 45 in case of a CA in practice/ proprietary CA firm and 45 tax Audit assignments per partner in the firm in case of a CA Firm

(This does not include audits conducted under section 44AD, 44AE and 44AF of the Income Tax Act 1961)

·         In case of membership of a CA in more than one Firm, the total assignments taken by him in all the firms shall not exceed 45

·         Where any partner of a CA Firm accept one or more audit assignments in individual capacity, the total assignments which may be accepted by him shall not exceed 45

·         A CA in practice shall maintain a record of the tax audit assignments accepted by him in each financial year

Company Audits under section 224/228 of the Companies Act 1956

·      Not to hold at any time appointment of more than the “specified number of audit assignments” of Companies (i.e. 30 in case of CA in Practice / Proprietary firm and 30 Audit assignments per partner in the firm in case of CA Firm

(Provided that the number of audit assignments of public companies each of which has a paid up share capital of Rs 25 Lakhs or more shall not exceed 10)

·         In case of membership of a CA in more than one Firm, the total assignments taken by him in all the firms shall not exceed 30

·         Where any partner of a CA Firm accept one or more audit assignments in individual capacity, the total assignments which may be accepted by him shall not exceed 30

·         A CA in practice shall maintain record of the tax audit assignments accepted by him in each financial year

Applicable to both Tax Audits and Company Audits

·         In a CA Firm, specified number of assignments (45/30) are reckoned partner wise and not firm wise

·         Audit of one or more branches of the same concern by one CA in practice shall be construed as one assignment.

·         A CA being a part time practioner  or part time partner of a firm shall not be entitled for audit assignment