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Title: Accounts audit
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Chapter – 8 “COMPANY AUDITOR”
APPOINTMENT OF AUDITOR
Appointment of Subsequent Auditor
Non Government Company – Sec
...
owned
/ controlled Companies –
Sec
...
139(6)
Government, Govt
...
139(7)
Appointment of Auditor
First auditor shall be
First Auditor shall be appointed
appointed by
In prescribed manner (Rule 3)
1st
Proviso
Company shall place the matter
For ratification at every AGM
...
will be
Ordinary
If not ratified, Board of
Directors will appoint
auditor
...
Company shall inform the auditor
and ROC about the appointment of
auditor within 15 days of
appointment
...
Pankaj Garg
by CAG
In respect of a Financial
year
will be made by
CAG
Board of Directors
Within 30 days
Of registration of company
Within a period of 180 Days
If Board Fails, Board shall
From the commencement
Within 60 days
Of registration of company
inform the members
of financial year
If CAG does not appoint the
auditor
BOD will appoint within next
30 days
Members shall within 90 Days
If Board fails Board shall inform
the members
the conclusion of next AGM
At an EGM
Members shall within 60 days
Compiled by:
appoint the first auditor
Who shall hold the office till
CA
...
139(2)
Sec
...
An audit Firm as an auditor for more than two terms of
Unlisted Public Companies having paid
Members may resolve
up capital > 10Cr
...
partner & his team
Companies not covered above if public
at such interval as
borrowings from banks and FI/ public
may be prescribed
...
five consecutive years
...
139(4)
Central Government
May by Rules
Prescribe the manner of
rotation for Sec
...
Pankaj Garg
Having a common partner with audit firm
Whose tenure has just expired
As on date of appointment
Shall not be appointed as auditor of same company
for a period of five years
3rd
Proviso
Every Company
Existing before commencement of this Act
Shall comply with requirement of Sec
...
4th Proviso
Sec
...
Pankaj Garg
Right of company to remove auditor
Right of auditor to resign
...
139
Filling of Casual vacancies
– Sec
...
Co
...
139(8)(i)
Due to resignation
Other
Reasons
Govt
...
/Govt
...
- Sec
...
139(9)
No auditor Appointed
at AGM
– Sec
...
139(11)
A retiring auditor may be
If no Auditor is
Where a company is
appointed
required to constitute an
Reappointed at AGM, if he
is
Be filled by
BOD
shall be
177)
Existing auditor will
All appointments
CAG
continue
including filling of casual
vacancies
Not unwilling to continue,
Within 30 days
Such appointment
at AGM
Not disqualified under
law
Be filled by BOD
audit committee (Sec
...
r
...
recommendations of
vacancy
Approved in General
meeting
(a) Appointing
It will be filled by
Convened within 3
months
Shall be made only after
someone
audit committee
...
Pankaj Garg
that retiring auditor
Board of Directors
shall
not
be
reappointed
...
Pankaj Garg
Within next 30 days
Page 3
Sec
...
140(1) – Removal before expiry
Requires
Sec
...
Within 30 days of
Before taking any action, auditor concerned
resignation
should be provided an opportunity of being
heard
...
Companies)
in Form ADT-2
...
Opportunity
Board
Resolution
Application
to CG
Compiled by: CA
...
140(4) – Special Notice
Sec
...
or
(b) To appoint as auditor any
person other than retiring
auditor
...
Copy of notice to be sent
immediately to concerned auditor
...
G
...
that he shall not function as an auditor
and
C
...
may appoint another auditor in his place
...
resignation
...
140(3): Fine for non-
Representation need not be
compliance, Ranging from
sent or read out at meeting, if
Rs
...
5,00,000
on application of company or
other person, Tribunal pass
Compiled by: CA
...
G
...
such order
...
141 – Eligibility, Qualifications and Disqualifications of Auditor
Sec
...
141(3) - Persons not eligible for appointment
If after appointment
(a)
Body Corporate other than LLP
(b)
Officer or Employee of the company
(c)
Partner/Employee of Officer/Employee of the company
(d)
(i)
only if he is a CA
...
(iii)
Practicing in India
Sec
...
141(3)
of 3rd person > 1 Lac in the
* no disqualification if relative holds any security in the company of face value
are Qualified
He shall vacate the office
upto 1 Lac
...
(g)
A person who is in full time employment elsewhere
Or
If appointed as Auditor
Compiled by:
CA
...
(h)
Shall be authorized to
10 years has not elapsed
...
Compiled by: CA
...
Page 5
POWERS / RIGHTS & DUTIES OF COMPANY AUDITOR (Sec
...
143(1)
Right to
Obtain
Info
...
Cos
...
143(5)
CAG – direct the
auditor the manners
in which accounts
are to be audited
...
Action
taken
thereon
Its impact on
Accounts and F
...
DUTIES of AUDITOR
at all times
to books of Account & Vouchers
whether kept at Regd
...
From the officers of the company
As considers necessary
For performance of his duties
...
143(6)
Within 60 days of
days of receipt of
Audit Report
Test Audit
– Sec
...
S
...
companies
Bu such persons as
authorized by him
Inquire into Propriety
Matters – Sec
...
143(2)
Reporting u/s 143(3)
1
...
2
...
3
...
4
...
5
...
6
...
That to the best of auditor information & knowledge, the accounts & financial statements give a true and fair
view of the state of the company affairs as at the end of its financial year & profit & loss and cash flow for the
year
...
Obtained all necessary information for the audit
...
Proper books of accounts have been maintained
...
Branch audit report has been received and manner of dealing with it
...
143(4)
4
...
5
...
For every
6
...
matter
7
...
reported with a
8
...
r
...
maintenance of accounts
...
Adequacy and operative effectiveness of internal financial controls
...
Other matters as prescribed
...
Disclosure of impact of pending litigations on financial position
...
Provisions for Material Forseeable losses on long term contracts made
...
Any delay in transferring amounts to IEPF
...
Pankaj Garg
Committed by officers or employees
Rule 13
Fraud > 1Cr
...
143(8)
Sec
...
143(10)
Sec
...
(CARO, 2016)
Compiled by: CA
...
, forward his report to CG along with a
note that reply not recd
...
Nature of Fraud with description
Parties involves
Approx
...
142, 144, 145, 146 & 147)
Sec
...
144 – Auditor not to
render certain services
Sec
...
141(2)
Shall be General meeting
As approved by the BOD
or in such manner as
may
be
to Rs
...
Officer in default–Imprisonment
Services that cannot be rendered directly or indirectly to
All Notice & other
upto 1 year or fine from Rs
...
1 Lac or Both
general
Co, Holding or Subsidiary
meetings
first auditor if appointed
Accounting & Book Keeping
...
Design & Implementation of Financial Information System
...
Elements of remuneration
Shall
include
expenses
all
incurred
connection
with
in
audit
and any facility extended
Investment advisory
...
Violation of Sec
...
25,000 to Rs
...
In case of Willful default –
Imprisonment upto 1 year and
fine from Rs
...
25 Lacs
If auditor convicted u/s 147(2)
he shall be liable to
at such meeting on
Compiled by: CA
...
Compiled by: CA
...
exempted
his
to auditor
...
Over the Company & Officer in
default – 147(1)
Company – Fine from Rs
...
147 – Punishment for
Contravention
Violation of Sec
...
determined
therein
...
146 –
Attending of
General meetings
Refund the remuneration
and
Pay for damages
Page 7
Title: Accounts audit
Description: It will help the readers to understand its content and help them to get a grasp over the topic easily and quickly.
Description: It will help the readers to understand its content and help them to get a grasp over the topic easily and quickly.