Director act as an auditor after resignation

[anil kalia]

Can a director(not wholetime) of a company resigns and be appoited as auditor of the same company.

[Markesh Antony]

There are various guidelines in which an auditors is being appointed for a company. It seems that there should not be any issue or problem to appoint a former director as an auditor of a company provided he satisfies all the conditions. The first and most condition in this case that he should not have any interest in the company. A director who has resigned from a company board, who has received remuneration and sitting fees, it may be difficult for him to satisfy the conditions of an independent director.

AI Summary

Independence of auditor may be compromised if a former director received remuneration, affecting appointment as auditor.
Appointment of a resigned non-wholetime director as auditor depends on absence of any disqualifying interest and satisfaction of auditor eligibility criteria; prior receipt of director remuneration and sitting fees may undermine independence and make meeting auditor independence standards difficult.