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AUDIT

GROUP:- 6
ROLL NO:- 102-112

TOPIC
RIGHTS,DUTIES AND
LIABILITIES OF AN
AUDITOR.

What is auditing? Who is an auditor?

RIGHTS OF AN AUDITOR :
According to section 227 (1) of the Companies Act, 1956, a
company auditor has the following rights:
1.Right of Access to Books of Accounts.
2. Right to obtain Information and Explanations.
3. Right to Correct any Wrong Statement.
4. Right to visit Branches.
5. Right to Signature on Audit Report.

6. Right to receive Notice and other Communications


relating to General Meeting and attend them.
7. Right of being indemnified.
8. Right to have Legal and Technical Advice.

DUTIES OF AN AUDITOR:
(A).SATUTORY DUTIES1. Report to members [sec 227 (2)]
2. Duty as to inquiry [sec227 (1-A)]
3. Duty to sign report [sec 229]
4. Duty as to satutory report sec [165(4)]

(B). DUTIES UNDER PROFESSIONAL


ETIQUETTE:
1.An auditor is not to advertise or canvass
anybody for getting business.
2.An auditor is not give any share of his
remuneration for getting business.
3.Before accepting his appointment in place
of any retiring auditor he must
communicate to know the reasons why the
outgoing auditor was not reappointed and
to know his objections if any.

LIABILITIES OF AN AUDITOR:
(A) CIVIL LIABILITIES:1. Liability for negligence.
2. Liability for misfeasance.

(B) CRIMINAL LIABILITIES


1. Section 240
2. Section 242
3. Section 477
4. Section 478
5. Section539
6. Section 545
7. Section 628

AUDIT &
AUDITORS
NEW
PROVISION

AUDITOR NOT TO
RENDER CERTAIN
SERVICES

OVERVIEW
Section 144

The section provides that an auditor appointed under this Act shall not
directly or indirectly provide any of the following other services to
auditee-company or its holding company or subsidiary company:

Accounting and book keeping services


Internal audit
Design and implementation of any financial information system
Actuarial services
Investment advisory services
Investment banking services
Rendering of outsourced financial services
Management services
Any other services as may be prescribed

If the partners of the firm has acted in


fraudulent manner or colluded in any
fraud the liability whether civil or
criminal as stated in the act would be
of audit partner or partners concerned
as well as of the firm jointly and
severally.
If the contravention by the auditor is wilful or with
intention to deceive the company or its
shareholders or creditors or tax authorities, he
shall be punishable with imprisonment for a terms
which may extend to 1 year and with fine not less
than Rs. l lakhs to Rs. 25 lakhs
The auditor who has been convicted shall refund
the remuneration and pay for damages to company
or the statutory bodies.