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MODULE VII Company Auditor
Dr. K. SrinivasanDepartment of Management StudiesChrist
University, Bangalore
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Qualifications of an Auditor
Person is qualified for appointment as auditor of acompany only
when he is Chartered Accountant
A firm of auditors of which all the partners practicingin India
are qualified for appointment of the firm.
The object of an auditor is to possess professionalqualification
and is independence of all influencescontrols and personal interest
of the directors of thecompany.
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Tenure of Auditor is not for a particular year orfinancial
year.
Tenure-From one AGM to another AGM.
If AGM not held- will continue up to the accurateconclusion of
the AGM.
Tenure of Auditor
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Obligatory on every company to appoint anAuditor (i.e.)
The Auditor or the Individual should be aChartered
Accountant.
In case of Firm of Auditors, every Partner should be
qualified for appointment as an Auditor in theFirms name.
Statutory auditor can not be Internal auditor.
Appointment of Auditor
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Who Cannot be appointed as Auditor?
A Body Corporate
Officer or Employee of the Company
Person who is a Partner or in the employment of anOfficer or
Employee of the Company.
Person who is grateful to the Company for an amountexceeding
Rs.1000
Person holding any security of that Company after aperiod of one
year from the date of commencement of theCompanies Amendment Act
2000.
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Removal of Auditor
Special Notice required
Auditor can be removed before expiry of his term byCompany in GM
after previous approval of CentralGovernment
Approval of Central Government not required forremoval of First
Auditor.
Prior approval of Central Government require beforeactually
removing an Auditor. Though resolution forremoval can be passed
before.
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Filling - Casual Vacancy
Board of Directors may fill any casual vacancy of
Auditor.Vacancy caused by resignation - filled by the company in
GM.Such Auditor holds office till conclusion of next AGM.a) A
casual vacancy is not a vacancy created by a deliberaomission on
the part of the company to appoint an auditor
at its AGM.b) An auditor refuses to accept appointment or
re-
appointment not resignation.One of the two joint Auditors
resigns before the completion ofthe tenure - Casual VacancyComplete
change in the constitution of the firm of Auditors.
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Appointment of Auditor -Central Government
In case, the Auditor is not appointed at an AGM-Central Govt.
may appoint.The company has to give notice to Central
Governmentwithin 7 days after AGM that no auditor has
beenappointed.
a) Delay in giving such notice does not affect the jurisdiction
of
the Central Governmentb) Powers of Central Government -
Delegated to Regional
Director.
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Rights & Duties of Auditor
Right to access to Books, Accounts & Vouchers
Rights to obtain information and explanations.
Right to report to the members.
Right to visit branch Offices & access the Books.
Rights to receive notice of meetings & attend it.
Rights to receive remuneration
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