1. Right to access the books of accounts: Every auditor of the company has a right to access at all times to the books of accounts and vouchers of the company whether kept at the head office of the company or elsewhere.
2. Right to obtain information and explanation: He has a right to obtain from the directors and officers of the company any information and explanation as he thinks necessary for the performance of his duties as an auditor.
3. Right to correct any wrong statement: The auditor is required to make a report to the members of the company on the accounts examined by him and on every Balance Sheet and Profit and Loss Account and on every other document declared by this act to be part of or annexed to the Balance Sheet and Profit and Loss Account which are laid before the company in general meeting during his tenure of office.
4. Right to visit branches: According to Section 228, if a company has a branch office, the accounts of the office shall be audited by the company's auditor appointed under Section 224 or by a person qualified for appointment as auditor of the company under Section 226.
5. Right to signature on Audit Report: Under Section 229, only the person appointed as the auditor of the company or where a firm is so appointed , only a partner in the firm practising in India may sign the auditors report.
6. Right to receive notice and other communication relating to General Meeting and attend them: Under Section 231, an auditor of a company has a right to receive notices and other communications relating to General Meeting in the same way as a member of the company. He is also entitled to attend any general meeting which he attends or any part of the business which concerns him as an auditor.
7. Right of being indemnified: An auditor has a right to be indemnified out of the assets of the company against any liability incurred by him defending himself against any civil and criminal proceedings by the company if it is proved that the auditor has acted honestly or the judgment delivered is in his favour.
8. Right to have legal and technical advise : He has a right to seek the opinion of the experts and thus take legal and technical advice.
9. Right to receive remuneration: He has a right to receive remuneration provided he has completed the work which he undertook to do so.
Duties of the Auditor
1. To Enquire: The auditor shall enquire:
(a) Whether loans and advances made by the company on the basis of security have been properly secured and whether the terms on which they have been made are not prejudicial to the interests of the company or its members.
(b) Whether the transactions of the company which are represented merely by book entries are not prejudicial to the interests of the company.
(c) Whether loans and advances made by the company have been shown as deposits.
(d) If any shares have been allotted for cash, whether cash has actually been received in respect of such allotment.
2. To Report: The auditor shall report to the shareholders on accounts examined by him:
(a) Whether in his opinion the Profit and Loss Account referred to in his reports exhibits a true and fair view of the profits or loss.
(b) Whether in his opinion, the Balance Sheet referred to in his report is properly drawn up so as to exhibit a true and fair view of the state of affairs of business according to the best of information and explanation given to him as shown by the books of accounts.
(c) Whether he has obtained all the information and explanation which to the best of his knowledge and belief were necessary for the purpose of his audit.
(d) Whether in his opinion proper books of accounts as required by law have been kept by the company so far as appears from his examination of those books.
(e) Whether reports on the accounts of any branch office audited under Section 228 by a person other than the company's auditor has been forwarded to him as required.
3. . Other Statutory Duties:
Under Section 229, it is the duty of the auditor to sign the report prepared by him. Only a partner in a firm practising in India can sign the auditors report or authenticate any other document.
Under Section 56(1) the prospectus issued by an existing company shall contain a report from the auditor of the company regarding the Profit and Loss, Assets and Liabilities of the company and its subsidiaries, rates of dividend paid by the company for each of the five financial years preceding the issue of prospectus.
According to Section 165(4) the auditor of a company shall, in so far as statutory report relates to the shares allotted by the company, certify it as correct after the same has been certified as correct by not less than two directors of the company, one of whom shall be the managing director.
When a company goes into voluntary winding up and a declaration of the solvency is made by the Directors under Section 488(1), such a declaration is to be accompanied by the report of the auditor of the company.
Under Section 488(2) it is the duty of the auditor to make such report.
Under Section 240, it is the duty of an auditor to preserve and to produce to an inspector or any person authorised by him in this behalf with the previous approval of the Central Government all books and papers of, or relating to, the company or, as the case may be, of or relating the other body corporate which are in their custody or power and otherwise to give to the inspector all assistance in connection with the investigation which they are reasonably able to give.
Subcribe on Youtube - IGNOU SERVICE
For PDF copy of Solved Assignment
WhatsApp Us - 9113311883(Paid)
0 Comments
Please do not enter any Spam link in the comment box