1. Section 144:

1. There was no provision in Companies’ Act 1956 in respect to restrictions for providing certain services by the statutory auditors. The newly inserted section 144 of the Companies Act 2013 is the new provision that comes with the list of services that statutory auditors are restricted to render to their clients.

2. As per this section, the auditor shall provide only such services to the company that is approved by the board of director of the company or the audit committee. It should not be misunderstood that the services approved by the BOD shall override the provisions of this act. It should be clear that the services are to be approved by the BOD or audit committee keeping in mind the provisions of this act.

3. The services rendered by itself or through any other of its partners or its parent, subsidiary or associate entity or through any other entity, whatever may be the case where the firm or any partner of the firm has significant influence or control or whose name or trademark or brand is used by the firm or any of its partners.

The list of restricted services are:

1. Accounting and book keeping services;

2. Internal audit;

3. Design and implementation of any financial information system;

4. Actuarial services;

5. Investment advisory services;

6. Investment banking services;

7. Rendering of outsourced financial services;

8. Management services; and

9. Any other kind of services as may be prescribed.

10.  The section and details were produced for the academic knowledge only at this stage to make up mind by the Auditors and Corporate.

2. Section 147:

1. If any of the provisions of sections 139 to 146 is contravened, the company shall be punishable with fine which shall not be less than twenty-five thousand rupees but which may extend to five lakh rupees and every officer of the company who is in default shall be punishable with imprisonment for a term which may extend to one year or with fine which shall not be less than ten thousand rupees but which may extend to one lakh rupees, or with both.

2. If an auditor of a company contravenes any of the provisions of section 139, section 143, section 144 or section 145, the auditor shall be punishable with fine which shall not be less than twenty-five thousand rupees but which may extend to five lakh rupees.

3. Provided that if an auditor has contravened such provisions knowingly or willfully with the intention to deceive the company or its shareholders or creditors or tax authorities, he shall be punishable with imprisonment for a term which may extend to one year and with fine which shall not be less than one lakh rupees but which may extend to twenty-five lakh rupees.

4. Where, in case of audit of a company being conducted by an audit firm, it is proved that the partner or partners of the audit firm has or have acted in a fraudulent manner or abetted or colluded in any fraud by, or in relation to or by, the company or its directors or officers, the liability, whether civil or criminal as provided in this Act or in any other law for the time being in force, for such act shall be of the partner or partners concerned of the audit firm and of the firm jointly and severally.