Question

Difference between limited liability company audit and partnership audit

Answer 1

Explanation:

company audit :- the member of the company are called as shareholders of a comapany. partnership audit :- the member of the partnership firm are called as partners. Partnership audit - An audit partner is a certified public accountant and full equity partner in a professional accounting firm. ...

Answer 2

Answer:

Audit of Company:

1. Audit is compulsory under the Company Law and is governed by provisions thereof and, to some extent, by the articles of asso­ciation of a company.

2. Auditor is usually appointed by shareholders but sometimes he may be engaged by direc­tors or the government.

3. Auditor acts as an agent of shareholders.

4. Rights and duties of an auditor are governed by the Companies Act and cannot be in any way altered or restricted by anyone.

5. Auditor is liable not only for negligence under common law but also for misfeasance under the Company Law and no one, except a Court, can relieve him from such liability.

6. Auditor should go through relevant provi­sions of the Company Law, memorandum and articles, prospectus, if any, resolutions of shareholders and directors or government order re: his appointment, rights, duties and liabilities and should submit his report to shareholders as required under the law.

Audit of Partnership Firm :

1. Audit is not legally obligatory and is regu­lated by specific provisions of the partnership deed, if any or by terms of contract with the partners or arrangement with the proprietors, as the case may be.

2. Auditor is employed by the partners or by the proprietor.

3. Auditor acts for partners or the proprietor.

4. Rights and duties are usually governed by terms of contract or appointment with em­ployers who may ask the auditor to carry out a complete or partial audit or even to do some accounting work.

5. Auditor is liable under common law only and can even be exonerated from such liability completely or partially by virtue of a contract between him and his clients.

6. Auditor should go through partnership deed, if any, or get clear written instructions from his employers re: the scope of his work and his rights and liabilities and submit his report to the partners or the proprietor, strictly according to the terms of appointment.