1. CEILING ON NUMBER OF AUDITS SEC. 224(1B)

2. WHAT IS THE CEILING?
In case the auditor is an individual – the ceiling is ‘specified number’
In case of a firm of auditors – the ceiling is ‘specified number’ for every partner of the firm.
Where any partner of the firm is also a partner of any other firm of auditors – the ceiling is ‘specified number’ for such person in all the firms taken together.
Where any partner of a firm of auditors is also practicing in his individual capacity – the ceiling is ‘specified number’ for such person in the partnership firm and in his individual capacity taken together.

3. MEANING OF ‘SPECIFIED NUMBER’
‘Specified number’ means –
Not more than 20 companies (public)
Of which not more than 10 should be companies having a paid up capital of Rs. 25 lakhs or more.

4. AUDITS EXCLUDED:
Following audits shall not be included while computing ‘specified number’:
Audit of a private company
An audit of a guarantee company having no share capital
An audit of a foreign company
Audit of cooperative societies, trusts and corporations
An internal audit
Tax audits under Income tax act, 1961
A branch audit
Special audit and investigations

5. AUDITS INCLUDED:
Following audits shall be included while computing ‘specified number’:
A joint audit
An audit of a company licensed u/s 25

6. MAXIMUM NUMBER OF AUDITS
An auditor can accept a maximum of 30 audits including the audits of private companies (notification issued by ICAI).
Non-observance of this ceiling would amount to professional misconduct.