Page 133 - CA Final Audit Titanium Full Book. (With Cover Pages)

CA Ravi Taori

on the Audit of the Financial Statements.” The “Report on Other Legal and Regulatory Requirements” shall
follow the “Report on the Audit of the Financial Statements. ”.

(CNO - SA 700.280) Signature of the Auditor:
Signature: The auditor's report must be signed by the auditor, who is the engagement partner. If the firm is
appointed as the auditor, the report is signed in the personal name of the auditor and in the name of the audit
firm.
Identification: The signing partner/proprietor must mention their membership number assigned by the
Institute of Chartered Accountants of India (ICAI). The registration number of the firm, if applicable, should
also be included in the signed audit reports.
Legal Requirement: As per Section 145 read with Section 141(2) of the Companies Act, 2013, only the person
appointed as an auditor or the partner in the firm who is a chartered accountant may sign the auditor’s report or
any other document of the company required by law to be signed or authenticated by the auditor.
Professional Responsibility: The person appointed must make the report; otherwise, the essence of the
appointment will be lost. The skill and reputation of the practitioner are crucial, and if others are allowed to
make the report on behalf of the person appointed, it can lead to a loss of confidence and unusual legal situations.
It can also impact the practitioner's goodwill if reports for their appointments are made by others.
Previous Practice V/s Current Practice
Previous Practice: In a partnership firm like ABC & Co. Chartered Accountants, any partner (A, B, or C) could
sign as “ABC & Co.” in their own hand.
Objection: The Department of Company Affairs raised objections to this practice.
Recommendation: The Council of the Institute in the SA 700 “The Auditor’s Report on Financial Statements”
recommended changes to the signature practice for members in partnership.
New Signature Format: The recommended signature or authentication for the auditor’s report or any other
document should include:
• Firm Registration Number
• Signature of the member signing the audit report
• Designation of the member (Partner/Proprietor)
Professional Ethics.
Legal Provisions: The Companies Act, 2013 and Clause (12) of Part I of the First Schedule to the Chartered
Accountants Act, 1949 regulate the signing of financial documents by chartered accountants in practice.
Professional Misconduct: A chartered accountant in practice will be deemed guilty of professional misconduct
if they allow a non-member of the Institute or a non-partner member to sign on their behalf or on behalf of their
firm.
Non-CA’s: The provision aims to maintain professional purity by excluding non-chartered accountants from
signing balance sheets, profit and loss accounts, reports, and financial statements.
Not Partners: The provision also specifies that chartered accountants who are not partners should not be allowed
to sign these documents, ensuring that the line of professional responsibility remains clear and unambiguous.
Partners, as mutual agents, are exempted from this restriction. Allowing partners to sign these documents does
not interfere with the clarity of professional responsibility.

(CNO - SA 700.300) Place of Signature:
Place of Signature: The auditor’s report shall name specific location, which is ordinarily the city where the audit
report is signed (Generally place where auditor’s office is Situated)

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