Exclusive HOLI Discounts!
Get Courses and Combos at Upto 50% OFF!
Upgrad
LCI Learning

Share on Facebook

Share on Twitter

Share on LinkedIn

Share on Email

Share More

Ankur Garg (Company secretary)     20 April 2010

Authentication of accounts and signing by auditors

This is something very interesting topic under section 215 of the companies act, 1956 read with DCA circular mentioned below.


Authentication of accounts and signing by auditors

 

[DCA Circular No. 7 of 1974, dated 26-4-1974].

 

Where there is no time gap or very little time gap between the date of approval of accounts under section 215 by the Board of directors of a company and the date of the audit report thereon, the Department is of the view that responsibility for the preparation of the accounts of a company belongs to the directors who have to approve them before the auditors make their report thereon.

 

The Act is apparently silent on when the auditors may commence their work of audit. In other words, it does not clarify whether they have simply to await the directors' report on the accounts or proceed with the audit work in the meantime immediately after their appointment at the last annual general meeting.

 

The auditor's report comes at the end of the audit process and section 215 mentions nothing of the process preceding the preparation of the audit report by the auditors. Further that section 227 of the Act, gives the powers to auditor to access at all times to the books and accounts and vouchers of the company, which amply suggests that they do not have to remain idle at any time after their appointment as auditors.

 

Subject to the convenience of the company, auditor may actually commence the checking up of vouchers, etc., and the company may prepare trial balance sheets, etc., which will save time for the auditors in the preparation of their report in due course.

 

Thus, if the auditor signs the balance sheet on the same date on which the directors have approved it, it may not be inferred from this solitary circumstance that the auditor has not performed the audit efficiently.

 

 

Best Regards



Learning

 0 Replies


Leave a reply

Your are not logged in . Please login to post replies

Click here to Login / Register