Question

Write short notes on Audit of Limited Company.

Answer 1

Limited audit is usually (1) confined to certain accounts or operations, (2) is for a period less than one year, or (3) restricted to a specific purpose, such as a tax audit.

(a) As the First Auditor,

1. To see that the appointment has been duly con­firmed by the Board of Directors at the com­pany meeting held within one month of the date of incorporation of the company;

2. To check-up that the letter of auditor’s appoint­ment along with a copy of the board’s resolution have been sent to the auditor;

3. To verify that the audit assignment is within the terms of Section 224 of the Companies Act;

4. To ensure that the acceptance of audit work is informed to the Registrar of Companies within one month of the receipt of appointment.

(b) As an Auditor in place of Retiring Auditor:

1. To ensure that the formalities of the Company Law in this regard are really complied with;

2. To clearly communicate the Retiring Auditor in writing about the appointment before accept­ance so that he is not held guilty of professional misconduct;

3. To scrutinize the minutes of the Board meeting or general meeting about the appointment and the remuneration determined, before the con­firmation as to acceptance is sent to the Regis­trar of Companies.

(c) As an Auditor under the Government’s Order:

1. To go through the terms and conditions of the order received directly from the Government, and to see the original order copy received by the company in this respect;

2. To confirm his acceptance in writing to the Cen­tral Government.