Audit of Companies
Audit of Companies
procedure
by :
DR. T.K. JAIN
AFTERSCHO☺OL
centre for social entrepreneurship
sivakamu veterinary hospital road
bikaner 334001 rajasthan, india
FOR – PGPSE PARTICIPANTS
mobile : 91+9414430763
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What is audit ?
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What should be qualification of
auditor ?
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First auditor
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Number of audits a CA can
undertake?
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Procedure of appointment of
auditor
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How to appoint an auditor ?
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Casual vacancy ?
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Remuneration ....
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Reappointment of auditor ?
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Does appointment of auditor
require special resolution?
No,
but in some cases yes - when govt. /
scheduled banks / insurance companies /
financial institution is holding 25% capital in a
company, the appointment must be by spcial
resolution (otherwise the government will
appoint).
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Rights of auditor ?
Sec. 227 ;
he can access accounts
he can obtain information and explanation
attend AGM and be heard
receive remuneration
visit branch offices
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Duties of auditor
Sec. 227 :
make audit report
make adequate disclosure,
attend audit committee meeting of directors
give reasons for qualifications
sign the audit report
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Audit of branches
When you will set up branches of your
business all over India / world, then you may
appoint one auditor for all the branches or you
may appoint separate auditors for each branch,
but these auditors must be qualified (as per
company law of that country / India). The
branch auditor shall send his report to the main
auditor. The main auditor can visit the branch
also.
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Special audit (sec. 233A)
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Who will order for inspection ?
Registrar
SEBI
other government executives authorised for
this
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Why inspection?
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Powers of inspectors ?
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Actions on inspection report
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Can members (shareholders)
apply to govt for investigation?
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Report by investigators
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Action on default
Wind up : 243
actions as per criminal laws 242
recovery of damages 244
further investigations of other companies (247)
expenses of investigation (245) by govt, to be
recoverable from the convict
employess are protected (sec. 635B)
freezing of voting rights etc. As per sec. 250
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