an amount not exceeding Rs. 5 lakhs. Loans and Guarantees with an Audit Client that is a Bank or Similar Institution R511.5 A firm, a network firm, an audit team member, or any of that individual’s immediate family shall not accept a loan, or a guarantee of a loan, from an audit client that is a bank or a similar institution unless the loan or guarantee is made under normal lending procedures, terms and conditions, 511.5 A1 Examples of loans include mortgages, bank overdrafts, car loans, and credit card balances. 511.5 A2 Even if a firm or network firm receives a loan from an audit client that is a bank or similar institution under normal lending procedures, terms and conditions, the loan might create a self- interest threat if it is material to the audit client or firm receiving the loan. 511.5 A3 An example of an action that might be a safeguard to address such a self-interest threat is having the work reviewed by an appropriate reviewer, who is not an audit team member, from a network firm that is not a beneficiary of the loan. 511.5 A4 The above is subject to the Council guidelines on indebtedness, issued from time to time and additional restrictions under the Companies Act, 2013, as amended from time to time, where applicable. In accordance with Section 141 of the Companies Act, 2013, read with Rule 10 of Companies (Audit and Auditors) Rules, 2014 a firm, an individual practitioner, sole proprietor or partner (as the case may be) or relatives shall not be indebted in excess of Rs 5 lakhs (or such other limit as may be prescribed from time to time) to the Company, its subsidiary, or its holding or associate company or subsidiary of such holding company or provide guarantee or any security in connection with the indebtedness of any third person in excess of rupees one lakh (or such other limit as may be prescribed from time to time), to the Company its subsidiary, or its holding or associate company or subsidiary of such holding company.
Deposits or Brokerage Accounts
R511.6
A firm, a network firm, an audit team member, or any of that individual’s immediate family shall not have deposits or a brokerage account with an audit client that is a bank, broker or similar institution, unless the deposit or account is held under normal commercial terms.
The above is subject to the Council guidelines on
indebtedness, issued from time to time and additional restrictions under the Companies Act, 2013, as amended from time to time, where applicable. In accordance with Section 141 of the Companies Act, 2013, read with Rule 10 of Companies (Audit and Auditors) Rules, 2014, a firm, an individual practitioner, sole proprietor or partner (as the case may be) or relatives shall not be indebted in excess of Rs 5 lakhs (or such other limit as may be prescribed from time to time), to the Company, its subsidiary, or its holding or associate company or subsidiary of such holding company with respect to a brokerage account. Loans and Guarantees with an Audit Client that is Not a Bank or Similar Institution R511.7 A firm, a network firm, an audit team member, or any of that individual’s immediate family shall not accept a loan from, or have a borrowing guaranteed by, an audit client that is not a bank or similar institution, unless the loan or guarantee is immaterial to:
(a) The firm, the network firm, or the individual receiving the loan or guarantee, as applicable; and
(b) The client.
For the purpose of this subsection, “immaterial” shall refer to
an amount not exceeding Rs. 5 lakhs.
indebtedness, issued from time to time. and additional restrictions under the Companies Act, 2013, where applicable.
In accordance with Companies Act, 2013, a firm, an individual
practitioner, sole proprietor or partner (as the case may be) or relatives shall not be indebted in excess of Rs 5 lakhs (or such other limit as may be prescribed from time to time) to the Company, its subsidiary, or its holding or associate company or subsidiary of such holding company or provide guarantee or any security in connection with the indebtedness of any third person in excess of rupees one lakh (or such other limit as may be prescribed from time to time), to the Company its subsidiary, or its holding or associate company or subsidiary of such holding company.
