Recommendatory

1. Member in full time practice for not less than 10 years or a partnership firm in which such member is partner not to accept audit work of a Government company or Corporation for a fee of less than ₹ 3,000 except in case of newly formed Co. up to 2 years from commencement of operations.
2. Branch Audits of a company not to be conducted by its statutory auditors consisting of ten or more members but to be entrusted to local firm of auditors consisting of less than 10 members except where accounting records of branches are maintained at the Head Office of the Co. or significant operations of company are carried out at its branch office.
3. In case of large companies, senior firm not to object to appointment of a firm with less than 5 members as joint auditors. Practice of appointment of joint auditors to be encouraged.
4. Practising firm of CAs engaged in audit work to have at least one qualified member for every five non-qualified members of staff excluding articled/audit assistant, typists, peons or other office staff.
5. Auditor to disclose in the Company Balance Sheets the payments received by them for other services through media of a different firm or firms in which auditor is either a partner or proprietor.
6. Professional fees for audit and other services received by a firm, its partners individually and by other firm in which a partner or partners are partners, from one or more clients or companies under same management (as defined in S. 370(1B) of the Companies Act) not to exceed 40% of the gross annual fees of firm, other firms and partners referred to above in order to ensure that member is not over-dependent on one group of clients or companies under same management. Not to apply in a case where such fees do not exceed ₹ 2 lakhs from the group or where fees relate to audit of Govt. companies or where appointments are made by the Govt.

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