Management Consultancy Services u/s-144 of

Transcript:Management Consultancy Services u/s-144 of:
Management Consultancy Services u/s-144 of Companies Act 2013 By Akshit Bhatia Parshotam & Associates 1 Management Consultancy Management Consulting involves helping a business institution enhance their performance, by analyzing the current problems and creating a strategy for development. Organizations may require the services of management consultants for varied reasons. 2 Akshit Bhatia | Parshotam & Associates The Integrated Management Consultancy approach tackles all aspects of the Companies running, i.e., thorough planning, account outsourcing, practicality, transactional services and compliance outsourcing. 3 Akshit Bhatia | Parshotam & Associates Services not to be rendered by the auditor Section 144 provides that an auditor shall provide to the company only such services those are approved by the Board of Directors or the audit committee, as the case may be but shall not include the following services rendered “directly or indirectly” to the company or its holding company or subsidiary company, namely:— 4 Akshit Bhatia | Parshotam & Associates 5 Akshit Bhatia | Parshotam & Associates Disqualification of Auditor u/s 141 of companies act 2013 Section 144(h) has restricted the statutory auditors to provide “management services” but has not explained the meaning and scope of this expression even till date. Any person acting as Statutory auditor of the company rendering services under section 144 read with section 141(3)(i) shall vacate his office under section 141(4) and that vacancy will be treated as a casual vacancy under section 139(8). 6 Akshit Bhatia | Parshotam & Associates Time allowed to leave the restricted services by the auditors It may be noted that an auditor or the audit firm who or which has been performing any non audit services on or before the commencement of this act shall comply with the provision of this section before the closure of the financial year after the date of such commencement. 7 Akshit Bhatia | Parshotam & Associates Relatives under section 2(77) Relatives under section 2(77) of companies act 2013 includes:- 8 Akshit Bhatia | Parshotam & Associates Example Mr. X, a practicing CA is appointed as a ‘Tax Consultant’ of ABC Ltd in which his father is a Managing Director. Solution- A CA appointed as an auditor of a company, should ensure the independence in respect of his appointment. In this case Mr. X is a Tax Consultant and not a Statutory Auditor or Tax Auditor of ABC Ltd, hence he is not subject to the above requirements. 9 Akshit