Chap 6 Flashcards
First auditor
BOD within 90 days of incorporation
If not then commission may appoint
Subsequent auditor
Members at Agm
If unable to do so commission
Casual Vacancy
Filled by director within 30 days of occurrence if unable to do so commission
Mid term removal
Mid term removal by members by passing special resolution. BOD shall appoint with prior approval of commission
Disqualified Person Appointed
Void appointment
Commission shall appoint
Auditor unwilling to act
Commission shall appoint in this case
Tenure of auditor
From date of appointment
Till conclusion of next Agm
Removal of auditor
At AGM/ retirement
Before Agm/ mid ter removal
Remuneration
Decided by appointing authority
i.e. If appointed by director so he will decide
Recommendation by directors (for appointment)
Consent of proposed auditor
Notice to member and retiring auditor in notice of agm
Statutory auditor - Rights
Information
1. Access to books of accounts (at reg office or branch)
2. Require information
Statutory auditor rights during audit
Information
Access to books of account
Require information
-employees of company
-employees of subsidiary
-other holding books
Rights of statutory auditor after audit
General meeting
-Receive notice
-Attend
-Speak
-Make representation
Duties of statutory auditor
- F/s give true and fair view
- Prepare books of account
- Zakat
- Investment/Expenditure incurred
5z f/s drawn up - Information obtained
Qualification criteria of CA
- Public company or
- private company which is subsidiary of public company
- Private company paid up capital of rs. 3 million or more
Others CA, CMA
Disqualification criteria
- Shareholding - Discloses at time of appointment and Disposes within 90 days of appointment. (Spouse, Minor child) a company and associated company.
Indebted auditor
-Took loan from ordinary course of business, bank (he can do audit)
- Credit card with limit 1m, does not exceed. (Not for spouse)
- utility bill not paid for more than 90 days
Audit of cost accounts
Company engaged in production, processing manufacturing or mining is required to keep following cost accouting records:
Utilisation of material
Uti of labour
And uti of other input or items of cost
When to conduct cost audit
Commission may direct that an audit of cost accounts of the company shall be conducted as may be specified in the order
Who conducts cost audit
Chartered Accountant (CA ordinance 1961)
CMA (CMA act 1966)
Disqualification Criteria of statutory auditor
He or his spouse/minor child owns shares of company or associated company
If he is indebted to the company
If he has business relationship with the company
If he is or was employee of the company in last 3 years
If he is any employee/partner of employee of the company
If his spouse is director in the company
If he is a body corporate
If he has given guarantee or security
If he has been convicted by court of an offence involving fraud for last 10yrs
If hes ineligible for appointment as auditor under code of ethics of Icap/icma