December 30, 2021

The auditor’s report includes the following basic elements, ordinarily, in the following layout: 1.Title;                                                                                    […]

The auditor should review and assess the conclusions drawn from the audit evidence obtained as the basis for the expression of an opinion on the financial statements. This review and assessment involves considering whether the financial statements have been prepared in accordance with an acceptable financial reporting framework applicable to the entity under audit. It

The statutory duties of the auditor cannot be limited in any way either by the Articles or by the directors or members but a company may extend them by passing a resolution at the general meeting or making a provision in the articles. [Newton v. Birmingham Small Arms Co. Ltd. [1875]. An auditor is expected

Sub-sections (2) and (3) of section 227 provide that it is the duty of the auditor to report to the members of the company on the accounts examined by him and on every balance sheet and profit and loss account and every other document declared by the Act to be part of, or annexed to,

Sub-sections (1A), (2), (3), (4) and (4A) of the Companies Act, 1956 specifies the duties of an auditor of a company in a quite comprehensive manner. It is noteworthy that scope of duties of an auditor has generally been extending over all these years. The Companies (Amendment) Act of 1965 introduced two sub-sections (1A) and

Right of access to books, etc. – The auditor of a company, at all times, has the right of access to the books and accounts and voucher of the company whether kept at the head office or elsewhere and he is entitled to obtain from the officers of the company such information and explanations as

Section 225 lays down procedure to remove an auditor after expiry of the term, i.e., conclusion of the next annual general meeting. It requires that for appointing a person other than the retiring auditor or for proposing that the retiring auditor shall not be re-appointed, a special notice (14 days) is required for resolution to

Removal of Auditor before Expiry of Term As per sub-section (7) of section 224, an auditor may be removed from office before the expiry of his term, by the company in a general meeting, obtaining the prior approval of the Central Government in that behalf except that such approval is not required for the removal

Under section 224(8) of the Act, the remuneration of the auditors of a company is fixed: (1) by the directors when auditors are appointed before the first annual general meeting by the directors or to fill a casual vacancy (other than one caused by the resignation of the auditor);             

It has been mentioned earlier that before appointment is given to any auditor, the company must obtain a certificate from him to the effect that the appointment, if made, will not result in an excess holding of company audit by the auditor concerned over the limit laid down in section 224(1B). Section 224(1B) provides that

An auditor, before accepting the appointment in place of an auditor who has resigned should verify that the resolution appointing him as the auditor at the general meeting was duly moved and approved by the shareholders. In addition, he should refer to the resignation submitted by the previous auditor and also communicate with him so

Can the Board of directors be authorised by the general meeting to appoint auditors in the event of auditors appointed at an annual general meeting fail to accept the appointment? For knowing the correct legal procedure that should be followed in such a case, the Research Committee of the Institute had posed the following query