DUTIES OF AN AUDITOR UNDER COMPANIES ACT, 2013

TORAN LAL VERMA

1. Duty to Make report under section 143:

  1. 143 (2): whether the accounts give a true and fair view
  2. Whether he has sought all information and explanation
  3. Whether required books have been kept
  4. Report of branch account
  5. Fairness of B.S. and P\L account
  6. Observations and comments of the auditor
  7. Whether the director is disqualified from being appointed (section 164(2)
  8. Qualification, reservation and advise remarks
  9. Adequacy of internal financial control

2.Companies Auditors Report Order, 2016 (CARO).

Section 143 (3) the auditor are required to report about certain matters as per CARO, 2016. It includes

  1. Maintenance of record relating to fixed assets and verification of fixed assets
  2. Loans and advances given to third parties
  3. Acceptance of deposits by the company
  4. Deposit of undisputed dues etc.

3. Compliance with auditing Standards:

Section 141(9) central government may prescribe auditing standards based on the recommendations of ICAI

4. Duty to attend General Meeting:

Under Section 146, an auditor must attend the general meeting himself or through his representative.

5. Duty to report Frauds [sec 143(12)]

  1. Duty to report and not to detect
  2. Duty to report fraud and not to error
  3. Duty to report fraud to central government if the amount of fraud is more than 1 crore for an individual account. If the amount is less than 1 crore it must be reported to the audit committee (section 177).
  4. Expected frauds should also be recorded.
  5. Reporting of only those frauds is to be done which has happened and happening is being/has been committed.
  6. The incidents of fraud reported to the audit committee must be reported in the board’s report.
  7. If the auditor fails to comply with this section, he shall be punishable with a fine of 1 lakh and a maximum 25 lakhs.

Share with friends