Page 269 - CA Inter Audit PARAM

CA Ravi Taori
office of the company or at any other place and he is entitled to require from the officers of the
company such information and explanation as he may consider necessary for the performance of
his duties as auditor

➢ The right of access is not limited to those books and records maintained at the registered or head
office so that in the case of a company with branches, the right also extends to the branch records,
if the auditor considers it necessary to have access even if there is separate by auditor under
Section143(8).
Part III – Case Discussion
➢ In the given case where CA D was appointed as Statutory Auditor of Head office of RJ Ltd and CA
M was appointed to conduct Statutory Audit of Branch office of RJ Ltd., CA D wanted to visit
Mumbai Branch to verify the inventory records at Mumbai but management of RJ Ltd did not
allow CA D to verify the inventory records at its Mumbai Branch on the ground that branch audit
was already being undertaken by another CA M.
Part IV – Conclusion
➢ Keeping in view the above provisions of the Companies Act and facts of the case, it can be
concluded that CA D has a right to visit the branch for verifying inventory records at Mumbai even
if the branch accounts are audited by another auditor CA M, if he considers it necessary to do so
for the performance of his duties as an auditor.

QNO Sec-143(8) & 139 (1)- Appointment of Branch Auditor Old Course --
CoAud.74 Bhaskar CNO – CA.140/CA.360 (P16M/M20R/M21M/SM20/SM21)
During the year 2015-16, it was decided for the first time that the accounts of the branch office of AAS
Company Limited be audited by qualified Chartered Accountants other than the company auditor.
Accordingly, the Board had appointed branch auditors for the ensuing year. One of the shareholders
complained to the Central Government that the appointments was not valid as the Board of Directors
do not have power to appoint auditors, be they Company Auditor or Branch Auditors?
OR
"ABC Ltd is a company incorporated in India. It has branches within and outside India. Explain who can
be appointed as an auditor of these branches within and outside India. Also explain to whom branch
auditor is required to report."
Answer Part I -- Relevant Standards & Laws
▪ Section 143(8) of the Companies Act, 2013
▪ Section 139 (1) of the Companies Act, 2013
▪ Rule 12 of the Companies (Audit and Auditors) Rules, 2014,
Part II -- Requirements of Relevant Standards & Laws
➢ The Companies Act, 2013 leaves it to the company to designate or not to designate any
establishment of the company as 'branch office'. Under the Companies Act, 2013, only
establishment "described as such by the company" shall be treated as a 'branch office'.

➢ Further, as per Section 143(8) of the Companies Act, 2013,
Where a company has a branch office, the accounts of that office shall be audited either by
• the auditor appointed for the company (herein referred to as the company's auditor)
under this Act or
• by any other person qualified for appointment as an auditor of the company under
this Act and appointed as such under section 139.

Where the branch office is situated in a country outside India, the accounts of the branch
office shall be audited either by
• the company's auditor or
• by an accountant or by any other person duly qualified to act as an auditor of the
accounts of the branch office in accordance with the laws of that country and the
duties and powers of the company's auditor with reference to the audit of the branch
and the branch auditor, if any, shall be such as may be prescribed.

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