Rights & Powers of Auditors

1. Access to books, accounts & vouchers

2. To obtain information & explanations
3. To visit branch offices & right of access to books etc.
4. To receive notice of general meeting & to attend.
5. To receive information
Duties of Auditors
1. Acquaintance with the articles & the Companys Act.
2. Report to members
3. Further duties
1. Statutory report
2. Prospectus
3. Assistance in investigation
4. Following accounting standards
 Auditors Report
- Obligations to make an inquiry
1. Loans & advances made by the company
2. Transactions of the company
3. Personal expenses charged to revenue account
4. Receipt of cash for shares allotted
- Matters to be stated in auditors report
1. Obtained all information & explanations
2. Proper books of account have been kept by
company, reports from branches received
3. Auditors report of branch office, not audited by him
4. Accounts render true and fair view of the state of
affairs of the company
5. Balance Sheet and Profit & Loss A/c are in
agreement with the books of account
6. Compliance of Accounting Standard
 Disqualifications of an Auditor
1. A body corporate
2. An officer or employee of the company
3. Partner / employee of an officer or employee of the company
4. Indebted to the company for an amount exceeding Rs. 1000/- or
guarantor
5. Disqualified for appointment as auditor of any body corporate which
is
i) The companys subsidiary; or
ii) Its holding company; or
iii) A subsidiary of its holding company
6. A person holding any security carrying voting rights of that co. after a
period of one year from the date of commencement of Companys
Amendment Act 2000
 Books of Account
- Receipts & payment
- Sales & purchases
- Assets & liabilities
- Utilisation of material, labour or other items of cost
- Summarised account of all branch offices - in or
outside India
Location of books
Preservation of books
Inspection of books
 Statutory Books
1. Register of investments not held in companys name
2. Register of charges
3. Register of members
4. Index of members
5. Register of debentures holders
6. Index of debenture holders
7. Foreign register of members & debenture holders
8. Minute books of general meetings
9. Register of contracts, & companies & firms in which Directors are
interested directly
10.Register of Directors, M.D., managers and secretary.
11.Register of Directors share holding
12.Register of loans made, guarantees given or securities provided to
companies under the same management
13.Register of investments in shares & debentures of companies in the
same group
Boards Report (Sec 217)
a) The state of the companys affairs
b) The amount proposed as reserves
c) The amount recommended as dividend
d) Material changes affecting the financial position of the company
e) The conservation of energy, technology absorption, foreign
exchange earnings & outgo
f) Other changes occurred during the F.Y. like
I. In the nature of companys business
II. In the companys subsidiaries or in the nature of business
carried on by them
III. Generally in the class of business in which the company has an
interest
IV. A statement showing the names of employees getting
remuneration which is prescribed. Also indicate whether such
employee is a relative of any Director or manager of the
company
V. Fullest information & explanations on every reservation,
qualification or adverse remark contained in the auditors
report.
g) Reasons for the failure, if any, of complete buyback within the time
specified.