Various courts have penalised the auditors for non-performance of the above stated duties and therefore, the auditor should take note of these duties also. The auditor has a right to make statement in the shareholder's meeting relating to the accounts of the company only. The Audit Report must expressly state the following besides other necessary things ; a whether in his opinion and to the best of his information and according to the explanations given to him the accounts give the information required by the Act and in the manner so required. Let us now discuss these liabilities in some detail. Knowing or believing that such certificate is false in any material point, shall be punishable in the same manner as if he gives a false evidence.
· A right to be heard at general meetings which they attend on any part of the business that concerns them as auditors · A right to receive a copy of any written resolution proposed · A right to give notice in writing requiring that a general meeting be held for the purpose of laying the accounts and reports before the company of elective resolution dispensing with laying of accounts in force gtyutuguyt7 An auditor is a professional that accumulates and evaluates evidence to report on the degree a company's assertions comply with an established set of procedures or standards criteria. This blog post is not a professional advice. Both are actually doing the same thing, depends on the size of the hotel. Where the Branch Accounts are not audited by a duly qualified auditor, the auditor has a right of access at all time to the books, accounts and vouchers of the company and thus, may visit the branch, if he deems it necessary. The order will not apply to banks. Ability to Trace out Facts and Figures: Auditor should posses a realistic attitude towards his work. The Central Government before making any such order may consult the Institute of Chartered Accountants of India constituted under the Chartered Accountants Act, 1949, in regard to the class or description of companies, if the Government thinks it necessary.
The punishment is imprisonment for a term extending upto 5 years or a fine extending upto Rs. Auditors come in with their computers and see that the checks were deposited in the proper accounts. Unless he does this, his duty will be worse than a farce the auditor, however, is not bound to do more than exercise reasonable care and skill in making the enquiries and investigations. The agreement with his client is very much valid in the eye of the law even though there is no monetary consideration involved. He is also liable to Public Examination and if found guilty by a court can be declared unqualified for appointment as an auditor for 5 years.
Thus it is clear that where the auditor is appointed by the Board, it is to fix the remuneration; if he is appointed by the Share Holders in the General Meeting, the remuneration is to be fixed in the Annual General Meeting ; if he is appointed by the Central Government, the remuneration is to be fixed by it. But he should give his own opinion in the audit report and not that of the experts. To make special enquiries and investigations in connection with the following matters Sec. He cannot be relieved of his liability by an agreement entered in between him and his client. The penalty for this act is a fine upto Rs. Duty to perform his task with ability, care and skill.
Auditors are not concerned with the policy of the company or whether the company is well or ill managed. When a company goes into its voluntary winding up and a declaration of solvency is made by its Directors under section 488 I , such a declaration is to be accompanied by the report of the auditors of the company under section 488 2. The branch auditor shall prepare a report on the accounts of the branch examined by him and send it to the auditor of the company who shall deal with it in his report in such manner as he considers necessary. The number of the shares allotted by the company, whether against cash or for any other consideration; b. What are the qualifications and disqualifications of a company auditor. In such a case also, he should answer questions relating to accounts only.
It is none of his concern to know whether the same has reached to the hands of the members of the company. Auditors failed to verify the physical existence of cash in hand. He will, however, decide as to which information or explanations he thinks necessary to obtain. Major Case Laws 1 London and General Bank Ltd. Right of Access Books of Accounts: As per Section 227 1 of the Companies Act every auditor of the company has the right to access at all times to the books of accounts and vouchers of the company, whether kept at the head office of the company or elsewhere. This entitles him to use the letters A. Stakeholders can be influenced greatly by an audit.
He shall be punishable in the same manner as if he has given false evidence. Lesson 7 Appointment, Powers, Duties And Liabilities of the Auditor Appointment Qualifications In this lesson you are being told about the appointment, powers, duties and liabilities of the auditor. They may give a qualified, unqualified, adverse opinion or even a disclaimer. Powers and duties of auditors as to reports on accounts. This duty is discharged by their making personal inspection of the securities in question. He is a watch-dog but not a blood hound. The civil liabilities of an auditor can be for:- i Negligence ii Misfeasance i Liability for Negligence under law of agency Auditor being agent of the Shareholders is required to carry out his duties with reasonable care and skill.
Ability to Work Hard: The auditor must have a painstaking attitude and willingness to work hard. Duty to inform the members and shareholders about the contravention of the provisions of the company Law. Sometimes investigation involves e-mail tracing to ascertain intent an element that must exist for any one to be convicted of fraud. It is the duty of an auditor that he should verify investments himself while certifying such investments. Right to sign the Audit Report: As per section 229 of the companies act only the person appointed as auditor of the company or where a firm is so appointed, only a partner in the firm practicing in India, may sign the audit report or authenticate any other document of the company required by law to be signed. It was held that auditor is guilty of negligence. This reasonable care depends on the particular circumstances of each case….