Page 116 - Quick Insights Book 2022

Ann. 1 – Policy of Empanelment of CA Firms/LLPs and Selection of Auditors

(iv) At least one of the full time CA partners of Head office of the firm/LLP located at other Places:
the firm/LLP must possess CISA qualification
from ISACA or ISA qualification from ICAI. ACA partner ` 1.80 lakh
(v) The firm/LLP should have audit experience FCA partner ` 2.70 lakh
of five years of audits assigned by CAG.
$ Compensation will be sum total of share of
(b) Allotment of Major Audits is based not only on profit, remuneration and interest on capital
the point score, size of the firm/LLP considering received by the partner from the firm/LLP.
the number of CA partners, and their association Compensation received by the partners who join
with the firm/LLP, number of Chartered Accountant during the financial year, will be extrapolated
employees, and the Zone in which the firms’/LLPs’ to arrive at the deemed compensation for the
complete financial year. Compensation criteria
Head office is located but also on the factors such as of FCA partner will apply on partners who
sectoral experience, service tax paid by the firm/LLP become FCA during the financial year.
on assurance services, capability of handling big audits,
past performance, eligibility of the firm/LLP to conduct a (c) ii) A partner whose individual percentage share in
particular audit, location of the firm’s/LLP’s branch offices the total compensation during the previous financial
etc. year is less than:

• Rotation of Audits Firms having more than 14 partners 1%
i. The total period of appointment of a firm/LLP as Firms having 10 to 14 partners 3%
auditor shall be for four financial years provided Firms having 5 to 9 partners 5%
the firm/LLP continues to be eligible for the said
audit, its point score has not reduced by more Firms having less than 5 partners 8%
than 25 per cent over the previous year’s point
score and the firm/LLP has not been debarred @Total compensation will be sum total of share
from appointment in the year by this office. of profit, remuneration and interest on capital
from the firm/LLP. Compensation received by the
ii. A firm/LLP who retires/surrenders from audit of partners who joins during the financial year, will be
a Maharatna Company, shall not be entitled for extrapolated to arrive at the deemed compensation
allotment of audit of any Maharatna Company for a for the complete financial year and then will be
period of four years after such retirement/surrender. added to the compensation of other partners to
arrive at total compensation.
iii. In case of a Maharatna/ Navratna Company, a firm/
LLP after retiring/surrendering is not considered for (d) A partner whose professional income from sources
the same Company for a period of five years. other than the firm (except as permitted by ICAI)
is more than the compensation from the firm/LLP.
[1] Full time CA partner does not include a person who is
Full time CA employee does not include a person who
(a) a partner in other firms/LLPs is:

(b) Employed full time/part time elsewhere, practicing (a) a partner in other firms/LLPs
in their own name or engaged in practice otherwise
or engaged in other activity which would be (b) Employed full time/part time elsewhere, practicing
deemed to be in practice under Section 2(2) of in their own name or engaged in practice otherwise
the Chartered Accountants Act, 1949. or engaged in other activity which would be
deemed to be in practice under Section 2(2) of
(c) i) A Partner whose compensation $ from the firm/ the Chartered Accountants Act, 1949.
LLP during previous financial year is below the
following limit: [2] Sole proprietors/CA partners/CA employees will get
points if they were exclusively associated with the firm/
Head office of the firm/LLP located in Delhi, LLP throughout the calendar year immediately preceding
Mumbai, Chennai, Kolkata, Bangalore and the year of empanelment.
Hyderabad:
[3] In case of merger, the proprietor/partners of the merging
ACA partner ` 2.70 lakh firm/firms/LLP/LLPs will be assigned points after one
calendar year of merger. For the first five calendar years
FCA partner ` 4.50 lakh
after merger, the merging partner/s would be deemed to
have joined the firm/LLP from the date of merger. The

Quick Insights on Professional Opportunities for Chartered Accountants 103