before appoinment, an auditor owes to a company more than
rs.1000 and he clears his debt before appointment.he is due
to company upto 30-06-06.he is give his report between 01-
04-06 to 31-03-07.what is the duty of the auditor while
reporting on the transactios occured in his due period
- 1 Answers
- 3434 Views
- I also Faced
- E-Mail Answers
Answer Posted / chalapathi rao govada
AS per Sec 226 of companies Act 1956,if any person who owes
to the company for a sum more than Rs1000 he is not
eligible to appoint as a auditor of such organisation.
So Sec 226 is not specify the Material date for deciding
the debtness.
But if you interpert the terminology used in Sec 226 it is
very clear that the date when proposal to appoint any
person as auditor has high significance.
It means when Auditor is proposed to be appoit as statutory
auditor is material date for deciding the validity of
appointment.
In the given case it is very clear that the individual is
owed to company more than 1000 which is repaid before
appointment.So on the date of proposal to appoint as a
auditor he is indebted to company.So he is not at all
eligible to appoint as a auditor for that organisatin.
In additin to this he is going to report if appointed for
the period which includes his indebtness.
So he is not eligible to appoint as auditor for such
company as per the provisions of Sec 226(2) of the
companies act.
You can aslo refer to the ICAI clarifications to this
extent.
| Is This Answer Correct ? | 3 Yes | 0 No |
Post New Answer View All Answers
What is the purpose of meeting in audit?
what is the accounting treatment on Putoption over own shares.?
How to do an internal audit effectively?
Define vouching?
What is final audit?
i have to finalize a mineral water co. for the year 2014-15 and i want to know that what will be rate of excise duty on sale of mineral water.
Should the duty of creating a purchase order be segregated from the duty of creating a vendor?
what audit procedure i can do in the share capital account of a company and why it have been apply?
what is audit & activities of auditor?
whta is the current SBAR? Please provide the past rates from 1st january 2011 to till date.
purchase price of property purchased within last 3 years is to be relied upon not and not on revalued amount for the purpose of loan against properties.
What are the essential of internal audit?
hi friend i have selected in ssc cgle as accountant in audit department. can anyone tell about the work of accountant in audit department?
What are objectives of internal audit?
Explain the importance of internal audit to the organization?
