Question ID :
40710
TAX AUDIT ENGAGEMENT
As per 2nd SechedulePart-I , clause 4 -A member of the Institute shall not express his opinion on financial statements of any business or enterprise in which one or more persons who are his “relatives” within the meaning of Accounting Standard (AS - 18) .
As per AS 18 Relatives - in relation to an individual, means the spouse, son,daughter, brother, sister, father and mother who may be expected to influence, or be influenced by, that individual in his/her dealings with the reporting enterprise
Since definition of relative in AS-18 does not include spouse's father & mother , whether i can take up tax audit assignments of father-in-laws 'proprietorship/partnership business. Please clarify & help me .
Posted by
VIVEK KUMAR GUPTA
on
Jul 05, 2020
Filed Under
AUDIT
Answer ID :
80608
Pl see my observation to query no. 40707
Posted by
B.CHACKRAPANI WARRIER on
Jul 07, 2020
Answer ID :
80613
No. Even if father-in-law is not included in definition of the term relative, he may influence in your dealings. There may be threat to objectivity and may be familiarity threat for the audit. Hence it not advisable to take up the assignment.
Posted by
CA. chunauti dholakia on
Jul 08, 2020