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The document discusses statutory audit requirements for companies in India. It covers the appointment and qualifications of auditors, their rights and duties, remuneration, and special audits. Key points include that auditors must be chartered accountants, boards appoint initial auditors who serve until the first AGM, subsequent auditors are appointed annually at the AGM, auditors have rights to company information and can be removed by shareholder vote.
The document discusses statutory audit requirements for companies in India. It covers the appointment and qualifications of auditors, their rights and duties, remuneration, and special audits. Key points include that auditors must be chartered accountants, boards appoint initial auditors who serve until the first AGM, subsequent auditors are appointed annually at the AGM, auditors have rights to company information and can be removed by shareholder vote.
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Attribution Non-Commercial (BY-NC)
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The document discusses statutory audit requirements for companies in India. It covers the appointment and qualifications of auditors, their rights and duties, remuneration, and special audits. Key points include that auditors must be chartered accountants, boards appoint initial auditors who serve until the first AGM, subsequent auditors are appointed annually at the AGM, auditors have rights to company information and can be removed by shareholder vote.
Авторское право:
Attribution Non-Commercial (BY-NC)
Доступные форматы
Скачайте в формате PPT, PDF, TXT или читайте онлайн в Scribd
TOPIC:- APPOINMENT OF AUDITORS REMUNERATION OF AUDITORS RIGHTS AND DUTIES OF AUDITORS SPECIAL AUDIT QULIFICATION IN AUDITORS REPORT QUALIFICATIIN OF AN AUDITOR
Sec 226 of companies act 1956 , that a
person shall not be qualified as an auditor of the company unless he/she is a chartered accountant holding a certificate of practice with in the meaning of the chartered accountants act 1949, and also any firm in which all the partners practicing in India are qualified for appointment as auditors of a company Disqualification of an auditor
The fallowing entities or persons have been
declared disqualified to be appointed as an auditor of a company A body corporate An officer or employee of the company A person who is a partner or who is in the employment of an officer or employee of the company Disqualification of an auditor A person indebted to the company for an amount exceeding Rs.1000 Who has given any guarantee in connection with the indebt ness of any third person A person holding any security of the a company after one year from the date of commencement of the company A person not possessing the chartered accounting certificate Appointment of auditor The auditor of the company should be appointed by the board of directors with in a month of the date of registration of the company by passing a resolution such auditor can hold office till the conclusion of the first Annual General Meeting How ever the company has the power to remove the auditor by giving 14 days notice and nominate another auditor at a general meeting Where the board fails to appoint such an auditor the company in GM may appoint the first auditor. Subsequent auditors Every company at each GM may appoint auditors to hold office from the conclusion of the next annual GM . The company should give intimation of the appointment to the auditor with in 7 days of the appointment. Every auditor so appointed at an AMG should with in 30 days of the receipts the intimation from the company, inform the Registrar of companies in writing his acceptance or refusal of appointment The board of directors is authorized to fill any casual vacancy excepting a vacancy arriving out of resignation which is to be filled only by the company in the Gm Other appointments Sec 224 A, provides that a company in which 25% or more share capital is held by government company or by government it self the appointment of an auditor shall be made by a special resolution. If the company fails to pass special resolution . It shall be deemed that no auditor had been appointed by the company at its GM and the Central Government will be empowered to make the appointment Appointment by central government
In case no auditors are appointed or reappointed u/s
224 A,at AGM, the C.G may appoint a person to fill the vacancy The C.G has the power to fix the remuneration of auditor appointed by it and paid by the company. It is the duty of the company to inform the C.G about the fact that no auditor has been appointed , with in 7 days of the AGM Failure to give notice to the C.G will make the company and every officer in default, liable to a fine extending to Rs.5000/- Reappointment of an auditor
As per sec 224(2) an auditor may be
reappointed at AGM , except in four cases namely Where he is not qualified for reappointment His unwillingness to re appointment Resolution passed at AGM to appoint someone instead of him Death, incapacity, or disqualification of that person Ceiling on audit According to SEC 224 –proposes ‘break the evil’ of continue association of C.A’s practicing as auditors singly or in firms, with groups of companies so that they may not have any temptation to shield the short comings of the management from the share holders
An auditor of firm of auditors can be auditor for 20
public companies and also any number of private companies as they may like Removal of auditors
Thecompany is empowered to remove him
any time before the expiry of this term by passing a resolution at a general meeting and with prior approval of the central government (not applicable to first auditor) Tenure of appointment
An auditor appointed at the AGM can hold
office from the conclusion of the meeting to the conclusion of next AGM . If AGM is adjourned he will hold office until the conclusion of such meeting Remuneration of auditors
The remuneration shall be fixed by the
company in AGM (except appointed by the Central Government and in all other cases) Remuneration classified into As auditor As adviser Other amount paid in any other manner Rights of auditors
Right to call for information and explanation
Right to have books of accounts Right to notices of and to attend meetings Inspection of articles , other than accounting books Right to remuneration Duties of auditor
care, skill and diligence and according to GAAP, standards of performance. He may be field liable for any careless or reckless act done by him Re Vs. London and General bank (1895) Leeds estate building & investment co Vs. Shepherd (1887) Auditing of braches
Onlythe company at General Meeting can
take a decision whether the accounts of the branch should be audited by the companies auditor or by a person other than the companies auditor SPECIAL AUDIT (SEC 233A) If the opinion of the central government
The affairs of the company are not being managed in
accordance with sound business principle or prudent commercial practices Management of the company to cause serious injury or damage to the interest of the trade, industry or business in which it operates The financial position of the any company is such as to endanger its solvency then it may order for a special audit of the company's accounts for a special period The expenses incurred by the auditor will be determined by the CG and paid by the company Qualified opinion
When an auditor gives an opinion subject to
certain reservations, he is said to have given a qualified opinion . In a qualified opinion , the auditors states that the financial statements reflect a true and fair view of accounts subject to certain reservations. A qualification should always be preceded by the words “subject to” Thank YOU “You have to do your own growing no matter how tall your grandfather was.” --Abraham Lincoln (1809- 1865) “What the mind of man can conceive and believe, the mind of man can achieve.” --Napoleon Hill author of Think and Grow Rich
"A pessimist is one who makes difficulties of his
opportunities and an optimist is one who makes opportunities of his difficulties." -- Harry Truman