Section 144 of the Companies Act, 2013
Section 144 of the Companies Act, 2013 specifies the prohibited non-audit services that an auditor of a company cannot provide, to maintain the independence and objectivity of the audit process.
📘 Section 144 – Auditor Not to Render Certain Services
This section restricts the statutory auditor (whether individual or firm) from directly or indirectly providing certain non-audit services to:
The company,
Its holding company, or
Its subsidiary company.
❌ Prohibited Services under Section 144:
An auditor shall not render the following services:
Accounting and book keeping services;
Internal audit;
Design and implementation of any financial information system;
Actuarial services;
Investment advisory services;
Investment banking services;
Rendering of outsourced financial services;
Management services;
Any other kind of services as may be prescribed.
🔒 These restrictions aim to prevent conflict of interest and ensure audit independence.
⚠️ "Directly or indirectly" includes:
Through the auditor's relatives or business partners,
Through another firm with common partners,
Or any entity in which the auditor has significant influence.
✅ Board Approval:
A company may engage the auditor for services other than those listed above, only with the approval of the Board of Directors or the Audit Committee (where applicable).
🧾 Example:
If ABC & Co. is the statutory auditor of XYZ Ltd., it cannot also be hired by XYZ Ltd. to design its financial software system or provide investment advisory services.
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