Question ID :
44840
Bank Audit Eligibility
I have 6 years of experience in practice as a Chartered Accountant under a proprietorship concern. I am exclusively associated with my firm. A fellow CA, who is also exclusively associated, has 3 years of experience. We are not in a partnership—my firm is still registered as a proprietorship concern.
As per the eligibility norms for empanelment of audit firms , under **Category IV**, it appears that a proprietorship concern can be eligible for bank audits with **2 CAs exclusively associated** with the firm, without needing to convert to a partnership firm.
Can someone please clarify:
- How can a proprietorship concern have 2 CAs exclusively associated, as required under Category IV?
- Is it acceptable under ICAI/empanelment rules for a second full-time CA to be employed or associated in a proprietorship concern without converting into a partnership firm?
- If the answer is to appoint as an employee, then can my friend continue with his Propeitorship Concer?
Your insights would be appreciated!
Posted by
JAY KUMAR KUMRANI
on
Apr 14, 2025
Filed Under
AUDIT
Proprietorship firms can qualify under Category IV with 2 exclusively associated CAs.
The second CA can be employed or associated, but must not be a proprietor/partner elsewhere.
If your friend wants to continue his own proprietorship firm, he cannot be counted under your firm for Category IV eligibility.
Would you like a draft declaration format for exclusive association or employee appointment letter for such a scenario?
Posted by
CA. JHA SHANKAR KUMAR on
Apr 15, 2025
Answer ID :
85803
You can include your CA colleague as an exclusively associated full-time employee, making your firm eligible under Category IV.
Your colleague must close or suspend his own proprietorship firm to maintain exclusive association with your firm.
No need to form a partnership if the criteria above are fulfilled.
Posted by
CA. JHA SHANKAR KUMAR on
Apr 15, 2025
Answer ID :
85811
agree with Jha....
Posted by
SIVADAS CHETTOOR on
Apr 19, 2025