Quick look at the draft rules
1) Limit on number of One Person Companies
(‘OPCs’) – One person cannot form more than 5
2) Rotation of auditors -Incoming auditor or
audit firm shouldn’t be under the same network
or operating under the same trademark or
brand as the outgoing auditor or audit firm.
Rotation of joint auditors
should be in such a way that all joint auditors
do not complete their term in the same year;
3) Auditor’s duty to report fraud – Auditors are
required to report material frauds to the Central
4) Disqualification of auditors –
a. Due to indebtedness – Limit increased from
Rs.1,000 to Rs.1,00,000.
b. Due to a relative holding shares – A relative
of an auditor may
hold securities of face value or interest in the
company not exceeding Rs 1,00,000;
5) Compulsion to appoint a women director –
At least one woman director is compulsory to be
appointed in case of listed companies and
unlisted companies with paid-up share capital of
Rs.100 crores or more.

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