Disqualifications of the Auditor :

The following persons shall not be eligible for appointment as an auditor of a company-

(i) a body corporate other than a limited liability partnership

(ii) an officer or employee of the company

(iii) a person who is a partner, or who is in the employment, of an officer or employee of the company

(iv) a person who, or his relative or partner and holding any security of or interest in the company or its subsidiary, or of its holding or associate company or a subsidiary of such holding company not exceeding Rs. 1 lakh.

(v) a person who, or his relative or partner is indebted to the company, or its subsidiary, or its holding or associate company or a subsidiary of such holding company not exceeding Rs. 5 lakh.

(vi) a person who, or his relative or partner has given a guarantee or provided any security in connection with the indebtedness of any third person to the company, or its subsidiary, or its holding or associate company or a subsidiary of such holding company, not exceeding Rs. 1 lakh.

(vii) a person or a firm who, whether directly or indirectly, has business relationship with the company, or its subsidiary, or its holding or associate company or subsidiary of such holding company or associate company

(viii) a person whose relative is a director or is in the employment of the company as a director or key managerial personnel;

(ix) a person who is in full time employment elsewhere or a person or a partner of a firm holding appointment as its auditor, if such persons or partner is at the date of such appointment or reappointment holding appointment as auditor of more than twenty companies;

(x) a person who has been convicted by a court of an offence involving fraud and a period of ten years has not elapsed from the date of such conviction;

(xi) any person whose subsidiary or associate company or any other form of entity, is engaged as on the date of appointment in consulting and specialised services as provided in section 144.

If any person appointed as an auditor of a company incurs any of the disqualifications mentioned above after his appointment, he shall vacate his office as such auditor and such vacation shall be deemed to be a casual vacancy in the office of the auditor.