Policy of
Empanelment of CA Firms and Selection
of Auditors of PSUs
Empanelment
of CA firms
Chartered
Accountant firms in India with at least one full time[1]
FCA (Partner/Sole Proprietor) can apply for empanelment with this office for
allotment of audit of Public Sector Undertakings during January-February as
notified every year.
The criteria for empanelment and selection of statutory
auditors have been arrived at after due consultation with the Institute of
Chartered Accountants of India.
Selection of CA firms for appointment as
statutory auditors of PSUs whose
audit fees are up to Rs 1.50 lakh
The
selection is made by correlating the point score earned by each firm of
Chartered Accountants towards empanelment with the size of the audit fee. The
point score[2] is based
upon the experience of the firm, number of partners and their association[3]
with the firm, number of Chartered Accountant employees, as detailed below:
|
Experience of
the firm |
0.5 point for every
year-Maximum 15. |
|
Full Time FCA Partners |
5 points each for first 5
partners and 2.5 points each for 6th partner onwards. |
|
Full Time ACA Partners |
3 points each for first 5
partners (including FCA partners) and 1.5 points each for 6th
partner onwards. |
|
Points for long
association with the same firm |
3 points for each partner
above 15 years. |
|
2 points for each partner
below 15 years and above 10 Years. |
|
|
1 point for each partner
below 10 Years and above 5 Years. |
|
|
Full Time CA Employees |
1 point each for first 20
C.A Employees and 0.5 point each for 21st C.A Employee onwards. |
|
CISA/ISA Qualified
Partners |
3 points for Ist partner,
2 points each for 2nd and 3rd partners-maximum 7 points
for 3 partners. |
|
CISA/ISA Qualified
Employees |
1 point each – Maximum 3
points for 3 employees. |
Selection of CA firms for appointment as
statutory auditors of PSUs where audit
fee is above Rs 1.50 lakh (Major Audits)
(a) Criteria for short-listing eligible firms of
CAs for allotment of Major Audits are as under:
(i) The firm should have at least 6 CAs (out of
which 5 should be full time partners and one could be a full time paid CA
employee), which is indicative of capacity to handle big audits.
(ii)
At least one partner
should have an association of 10 years or more with the firm and at least 3
partners of the firm should have an association of 5 years or more with the
firm and the remaining two should have an association of one year or more with
the firm, to demonstrate stability over time.
(iii)
The firm itself should
have been in existence for 10 years or more, to prove that it is a well
established firm.
(b) Allotment of major audits is based not
only on the size of the firm considering the number of partners, and their
association with the firm, number of Chartered Accountant employees, and the
Zone in which the firms’ head office is located but also on the basis of
factors such as sectoral experience, capability of handling big audits, past
performance, eligibility of the firm to conduct a particular audit, location of
the firm’s branch offices etc.
[1] Full time partner does not include
A person who is
(a) a partner
in other firms
(b) employed full time/part time elsewhere, practicing in their own
name or engaged in practice otherwise or engaged in other activity which would
be deemed to be in practice under Section 2(2) of the Chartered Accountants
Act, 1949.
(c) A
partner whose total take-out from the firm is less than:
Firms having more than 14 partners 1%
Firms having 10 to 14 partners 3%
Firms having 5 to 9 partners 5%
Firms having less than 5 partners 8%
[2] All members (sole proprietors/partners/ CA
employees will get points only after one year of their association with the
firm.
[3] In case of merger, the partners
of the merging firms will be
assigned points after one year
of merger and points for partner’s association to be given after
two years from the date of merger.