Page 152 - CA Final Audit Titanium Full Book. (With Cover Pages)

CA Ravi Taori

Conclusion: In our opinion, it is in this light that the auditor has to consider his duties under
section. 143(1).” Therefore, it could be said that the auditor should make a report to the members in case he
finds. answer to any of these matters in adverse.
2. Duty to Sign the Audit Report: (Sec 145)
1. Auditor's Signature: As per section 145 of the Companies Act, 2013, the appointed auditor shall sign the
auditor's report or any other company document as mandated by the provisions of sub-section (2) of section 141.
2. Qualifications and Observations: The auditor should include qualifications, observations, or comments on
financial transactions or matters that have an adverse effect on the company's functioning in the auditor's report.
3. Read in General Meeting: The matters mentioned in the auditor’s report with adverse effects shall be read
before the company in a general meeting.
4. Inspection by Company Members: The auditor’s report is open to inspection by any member of the
company.
3. Duty to comply with Auditing Standards: [143(9)/143(10)]
1. Compliance with Auditing Standards: As per sub-section (9) of section 143 of the Companies Act, 2013,
every auditor is required to comply with the auditing standards.
2A. Central Government's Role: According to sub-section 10 of section 143 of the Act, the Central Government
has the authority to prescribe auditing standards or any addendum thereto,
2B. Recommendations of ICAI: based on the recommendations of the Institute of Chartered Accountants of
India, established under section 3 of the Chartered Accountants Act, 1949.
2C. Consultation with NFRA: The Central Government will consult with and examine the recommendations
made by the National Financial Reporting Authority before prescribing the standards.
2D. Current Auditing Standards: Until new auditing standards are notified, the standards specified by the
Institute of Chartered Accountants of India are deemed to be the auditing standards.
4. Sec 143(3) Duty to audit report
Shortcut: (Points in Logical Sequence)
1. Information and Explanations: As per sub-section (3) of section 143, the auditor must state whether all
necessary information and explanations were obtained for the audit, and if not, detail the implications on the
financial statements.
2. Director Disqualification: The auditor should report if any director is disqualified from being appointed as
per sub-section (2) of section 164.
3. Internal Financial Controls with reference to FST (IFCR): The auditor should report on the adequacy and
effectiveness of the company's internal financial controls with reference to the financial statements.
4. Proper Books of Account and Returns: The auditor should state whether, in his opinion, the company
maintained proper books of account and received adequate returns for the audit, including from unvisited
branches.
5. Compliance with Accounting Standards: The auditor should state whether the financial statements comply
with the accounting standards.
6. FST Agreement with Books of Account: The auditor needs to confirm if the balance sheet and profit and
loss account in the report agree with the books of account and returns.

(Other Points if applicable)
(Shortcut: BAR)
Branch Office Report Handling: The auditor must mention if he received the report on any branch office
audited by someone else and how he dealt with it in his report.
Adversely affecting the company: The auditor must note observations or comments on financial transactions
or matters adversely affecting the company. (Loss Connected-Qualification/EMP/OMP/KAM etc)
Reporting on Account Maintenance: The auditor must state any qualification, reservation, or adverse remark
regarding the maintenance of accounts and related matters.

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