What are the rights and duties of a Company Auditor
Answers
Explanation:
Right of Access to Books of Accounts: ...
Right to obtain Information and Explanations: ...
Right to Correct any Wrong Statement: ...
Right to visit Branches: ...
Right to receive Notice and other Communications relating to General Meeting and attend them: ...
Right of being indemnified: ...
Right to have Legal and Technical Advice:
Answer:
Right and duties of company auditor are of statutory nature. The Companies Act of 1956 has clearly explained the rights and duties of a company auditor. The company cannot restrict them by means of its articles or in any other way.
Explanation:
Duty under Section 227: It is otherwise known as the duty to give report. After completion of audit work, the auditor should give a report expressing his opinion. The report may be long or summarized. It may be in the form of a letter or statement. Whatever the form may be, it must be addressed to shareholders. And its report may be with condition or without condition. An unconditional report is called a clean report and a conditional report is called a qualified report.
The audit report should include the following:
Whether the company is maintaining proper books and records or not.
Whether financial explanations from company staff are received or not.
Whether financial statements are prepared in accordance with the requirements of companies act or not.
Whether the balance sheet is giving a true and fair view or not.
Whether profit and loss account is giving a true and fair view or not.
If there are branches, whether statements from branch auditors under Sec. 228 are properly received or not.
Duties of Company Auditor: The Companies Act, 1956
Section 227: Duty to give report.
Section 165: Duty to certify statutory report.
Section 240: Duty to assist government inspector.
Section 58 (A) and 58 (B): Duty with regard to public deposits.
Section 62 and 63: Duty to certify prospectus.
Section 227 (1A): Duty to conduct an inquiry with regard to matters mention in the section.
Duty under Section 165: It is otherwise known as the duty to certify the statutory report. Every public company has to prepare a statutory report with regard to the statutory general meeting. A copy of the statutory report is to be filed with the registrar and its copies should be sent to members also. The statutory report includes the following matters;
Number of shares issued for cash
The number of shares issued for consideration other than cash.
Preliminary expenses.
Contracts to be ratified by shareholders.
Summary of receipts and payments made by the company from the date of incorporation to the date seven days before the preparation of this report.
Since all these items are related to accounting records, the auditor has to certify the statutory report.