BCom 3rd Year Appointment, Remuneration, Rights and Duties of an Auditor Notes Study Material
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Appointment, Remuneration, Rights & Duties of an Auditor Notes Study Material
QUALIFICATION OF A COMPANY AUDITOR
The auditor of a company must possess the qualifications prescribed under Section 141 of Companies Act, 2013. The object of Section 141 is to ensure that:
- An auditor possesses adequate educational qualifications for the profession of accounting.(Appointment and Remuneration of an Auditor Study Material)
- He is independent of all influences, controls and personal interest in the company.(Appointment and Remuneration of an Auditor Notes Study Material)
The prescribed qualifications under Section 141 are as under:
(i) Chartered accountant in practice: A person who is a chartered accountant within the meaning of Chartered Accountants Act, 1949 and holds a certificate of practice.(Appointment and Remuneration of an Auditor Notes Study Material)
(ii) Partnership firm of chartered accountants in practice: A partnership firm where majority of partners practicing in India are chartered accountants holding certificate of practice, may also be appointed as an auditor of a company. In such a case, the appointment of an auditor may be made in the name of the firm and any partner may act in its name.
DISQUALIFICATION OF AUDITORS
The following persons are not eligible for appointment as auditors of a company:
(a) A body corporate. An incorporated company (other than a limited liability partnership).(Rights and Duties of an Auditor Notes Study Material)
(b) An officer or employee: An officer or employee of the company.
(c) A partner or employee of an officer or employee of the company or its subsidiary or holding or associate or subsidiary of its holding company.
(d) (i) A person who or his relative or partner is holding any security or interest (exceeding Rs. 1,00,000):
(ii) Such person is indebted in excess of five lakh rupees.
(iii) Such person has given guarantee or provided any security in connection with indebtedness of any third person in excess of one lakh rupees.
(iv) A person or a firm whether directly or indirectly has business relationship (of prescribed nature):
Above mentioned persons are disqualified if they do business with the company, or its subsidary or its holding or associate company or subsidiary or such holding company.(Rights and Duties of an Auditor Notes Study Material)
(e) If his relative is director etc. in the company: A person whose relative is in employment of the company as a director or key managerial personnel.
(f) A full time employee elsewhere: A person who is in full time employment elsewhere.(Rights and Duties of an Auditor Notes Study Material)
(g) Is auditor in more than twenty companies: If a person or partner of a firm holding appointment as an auditor in more than twenty companies.
(h) Convicted person: A person who has been convicted by a court of an offence involving fraud and a period of ten years has not elapsed from the date of such conviction.( Remuneration and Duties of an Auditor Notes Study Material)
(i) Engaged in consulting and specialised services: Any person whose subsidiary or associate company or any other form of entity, is engaged in consulting and specialised services (like accounting and book-keeping, internal audit providing financial information, actuarial, investment advisory, banking, management services etc.)
The provisions of section 8 of the Chartered Accountants Act, 1949 may be noted in this regard as it provides additional grounds for disqualification of a company auditor.(Rights and Duties of an Auditor Notes Study Material)
Automatic vacation on becoming disqualified: Where an auditor incurs any of the above disqualifications after his appointment, he will deemed to have vacated his office.(Rights and Duties of an Auditor Notes Study Material)
APPOINTMENT OF COMPANY AUDITORS
Every company must appoint an auditor or auditors to audit its Annual Accounts. There are following three authorities to appoint auditors:
(1) Appointment by Directors. The first auditors of a newly floated company are appointed by the Board of Directors within 30 days of the registration of the company.(Rights and Duties of an Auditor Notes Study Material)
If the Board fails to appoint such an auditor, the auditor will be appointed by members within 90 at an extraordinary general meeting.
Such auditor will hold office till the conclusion of first annual general meeting.
Casual Vacancy: The Directors are also empowered to fill any casual vacancy in the office of an auditor within 15 days except one which is caused by prior resignation. The auditor so appointed shall hold office until the conclusion of the next Annual General Meeting. But if the vacancy is caused by the resignation of an auditor it shall only be filled by the company in General Meeting.
(2) Appointment in General Meeting. Every company shall, at each general meeting, appoint an auditor or auditors to hold office from the conclusion of that meeting until the conclusion of the sixth Annual General Meeting and thereafter till the conclusion of every sixth meeting.
The appointment till the sixth general meeting shall be subject to ratification in every annual general meeting by way of passing an ordinary resolution.
If the appointment is not ratified by members, the Board of Directors shall appoint another auditor.(Rights and Duties of an Auditor Notes Study Material)
Consent of auditors: Before appointment. written consent of the auditor to such appointment will be obtained by the company. The company will also obtain a certificate from the auditor that he accepts the appointment as per the stated terms. The auditor has also to state that he fulfils the conditions required for appointment as an auditor as per the Companies Act.
Notice to the Registrar. The notice of appointment of the auditor has to be sent Registrar within 15 days of the meeting in prescribed manner.
Appointing a person as auditor other than the retiring auditor
If some other person is to be appointed as an auditor of a company, other than the retiring auditor or it is expressly stated that the retiring auditor should not be reappointed for doing this a special resolution is to be passed at the annual general meeting and special notice about this has to be given to the member of the company.(Rights and Duties of an Auditor Notes Study Material)
On receipt of such a notice the company has to send a copy of such notice to the retiring auditor. The retiring auditor can make written representation to the company and request that his representation should be brought to the notice of the members. The company has to send auditor’s representation to members together with notice of the meeting. If the representation is received late it can be read at the meeting and copy of it sent to the Registrar. Auditor’s representation may not be read at the meeting if the auditor is misusing this rule.
This rule will not apply if an individual auditor has completed a tenure of five years or a firm of auditors has completed two terms of five years each and this is the reason that they are not being re-appointed.
The company shall, within seven days of the appointment, give intimation thereof to every auditor so appointed.
An auditor so appointed shall, within thirty days of the receipt from the company of the intimation of his appointment, inform the Registrar in writing that he has accepted or refused to accept the appointment.
Rotation of Auditors-gap of five years
Five years term: No individual can be appointed as an auditor of a company for more than one term of five years and a firm of auditors for more than two terms of five consecutive years. If the members so desire the auditing firms may be rotated after different intervals. The audit can be conducted by more than one auditor.
Five years Gap: An individual auditor who has completed his term of five years and an audit firm which has completed two terms of five years each are not eligible for re-appointment in the same company for five years from the completion of their terms.
Appointment by Special Resolution
In the case of a company, in which not less than 25% of the subscribed share capital is singly or jointly held by:
(a) a public financial institution or a Government company, or the Central Government, or any State Government; or
(b) any financial or other institution established by any Provincial or State Act, in which a State Government holds not less than 51% of the subscribed share capital; or
(c) a nationalised bank, or an insurance company carrying on general insurance business, the appointment or reappointment (at each annual general meeting of an auditors(s) shall be made by a special resolution.
The auditor so appointed should also be informed and he should also communicate his acceptance/non-acceptance to the Registrar.
Compulsory Re-appointment. If at any Annual General Meeting auditor has not been appointed. The existing auditor shall be re-appointed, unless:
(i) he is not qualified for re-appointment;
(ii) he has given a notice in writing of his unwillingness to be re-appointed:
(iii) a special resolution has been passed at that meeting appointing somebody else instead of him or providing expressly that he shall not be re-appointed: or Appointment in the case of Government Companies. The auditor of a Government company shall be appointed or re-appointed by the Comptroller and Auditor-General of India.(Rights and Duties of an Auditor Notes Study Material)
Auditors Appointed on the Recommendations of Audit Committee
Where a company is required to constitute an Audit Committee all appointments, including the filling of casual vacancy of an auditor shall be made after taking into consideration the recommendations of such committee.
In addition to listed companies, the following classes of companies have also to constitute an Audit Committee:
(i) All public companies with paid up capital of ten crore rupees or more.
(ii) All public companies having turnover of one hundred crore rupees or more.
(iii) All public companies having in aggregate outstanding loans or borrowings or debentures or deposits exceeding fifty crore rupees or more.
Ceiling on Number of Audits
An individual cannot be an auditor of more than twenty companies. In case of firm of auditors the number of audit will be twenty companies per partner. For example, if there are three partners in a firm of auditors the overall ceiling will be 3 x 20 = 60 company audits.
One person companies, dormant companies, small companies and private companies having paid-up share capital of less than 100 crores will not be counted for the purpose of ceiling of audits.
The ceiling on tax audit per auditor is sixty numbers.
REMOVAL OF AUDITOR
The auditors of a company can be removed in the following ways:
(1) First Auditor(s): When the first auditors of a limited company are appointed by the Directors prior to the First Annual General Meeting, such auditors may be removed by the members in General Meeting. The General Meeting may, in their place, appoint any other person whose nomination notice has been given by any member, not less than fourteen days before the date of the meeting.
(2) Removal before the expiry of term: Auditor may be removed from his office before the expiry of his term only by a special resolution of the company after obtaining the previous approval of the Central Government.
Before removing the auditor before expiry of the term the auditor concerned will be given a reasonable opportunity of being heard.
(3) Removal if auditor has acted in fraudulent manner: If the Company Law Tribunal is satisfied that the auditor of a company has, directly or indirectly, has acted in fraudulent manner or took part or colluded in any fraud in relation to the company or its directors or officers, the Tribunal can order the company to change its auditors. The Tribunal may pass such orders on its own or on the application of the Central Government or any other concerned person.
If the application is made by the Central Government and the Tribunal is satisfied that a change of the auditor is required it may within fifteen days of receipt of such application, make an order that he shall not function as an auditor and the Central Government may appoint another auditor in his place.
The removed auditor will not be eligible to be appointed as an auditor of any company for a period of five years. Further such an auditor can be imprisoned and can be fine also.(Rights and Duties of an Auditor Notes Study Material)
(4) Resignation by auditor: An auditor may resign from his assignment. The auditor who has resigned from the company has to file a statement in prescribed form with the company and the Registrar. This has to be done within a period of thirty days from the date of resignation.
REMUNERATION OF AUDITORS
The remuneration of the auditor of the company is fixed in its general meeting. The remuneration of the first auditor is fixed by the Board of Directors.
The remuneration is in addition to the expenses incurred by the auditor in connection with the audit of the company. The expenses may be for travelling, hotels etc.(Rights and Duties of an Auditor Notes Study Material)
Remuneration paid to the auditor does not include payment made to him for any other service rendered by him at the request of the company. Such services may relate to taxation advice, company law matters etc.
STATUS OF AN AUDITOR
(1) Agent of the Shareholders. An auditor is appointed by the shareholders and in the case of the first auditor by the directors (or by the Central Government in certain cases). He has the status of an agent but the question arises as to whether he is the agent of shareholders or of Directors.
The answer is obvious. He, for the purpose of audit, is expected to safeguard the interests of the shareholders and hence, he is the agent of the shareholders. In the course of the judgement delivered by Lord Cranworth in the case of Spackman vs. Evans, it was stated:
“The auditors may be agents of the shareholders so far as it relates to the audit of the accounts. For the purpose of the audit, the auditors will bind the members.”
In the case of Nicols re: Royal British Bank, it was held:
“These were auditors of the company appointed by the shareholders. These auditors were within the scope of their duty, at least as much as the agent of the shareholders as the directors were, and the false and fraudulent representations were discoverable by them.”
Thus, it appears that an auditor is an agent of the shareholders so far as the audit of accounts is concerned.(Rights and Duties of an Auditor Notes Study Material)
(2) An Officer of the Company. In another sense, an auditor enjoys the status of an officer of the company like manager, accountant, secretary, etc. Actually, he is not an officer (under Sections 299, 300, 340, 342, 439 and 463), but he is considered as an officer. Following are the headings of these sections:
Section 299—Power of the Tribunal in winding up to common persons suspected of having property of the company.
Section 300-Power of the Tribunal to order public examination of promoters, directors, etc., guilty of fraud, etc.
Section 340—Power of the Tribunal to assess damages against delinquent officers. Section 342—Prosecution of delinquent officers and members.
Section 439–Offences to be non-cognizabte.
Section 463 Power of the Court to grant relief in certain cases, i.e., in proceedings of negligence, default, breach of duty, misfeasance, etc.
In two well-known English cases, viz., Kingston Cotton Mills Co. Ltd. (1896) and London and General Bank (1895), it was decided that the auditors are the officers of the company.(Rights and Duties of an Auditor Notes Study Material)
(3) A Servant of the Company. The auditor is not an employee of the company in the sense in which the term is commonly understood. Neither he is an employee of the directors, because his principal duty is to examine the accounts prepared under them. But for certain purposes, as described above, the auditor is an officer of the company.(Rights and Duties of an Auditor Notes Study Material)
RIGHTS/POWERS OF AN AUDITOR
A company auditor has the following rights:
(1) Rights of Access to Books of Accounts. Every auditor of a company shall have right of access, at all times, to the books and accounts and vouchers of the com whether kept at the head office of the company or elsewhere.
Thus, the auditor may consult all the books, vouchers and documents whenever he so likes. This is his statutory right. He may pay a surprise visit without informing the Directors in advance but in practice, the auditors inform the Directors before they pay their visits.
(2) Rights to obtain Information and Explanations. He has a right to obtain from the Directors and Officers of the company any information and explanations as he thinks necessary for the performance of his duties as an auditor.
This is another important power in the hands of the auditor. He will, however, decide as to which information or explanations he thinks is necessary to obtain. If the Directors or Officers of the company refuse to supply some information on the ground that in their opinion it is not necessary to furnish it, he has a right to mention the fact in his report.
(3) Right to make report. The auditor is required to make a report to the members of the company on the accounts examined by him and on every Balance Sheet and Profit & Loss Account and on every other document declared by this Act to be part of or annexed to the Balance Sheet or Profit & Loss Account which are laid before the company in General Meeting during his tenure of office. While submitting his report the auditor has to follow accounting and auditing standards. The Directors have a duty to prepare them and present them to the auditor. The auditor cannot require but advise the Directors to amend their system of maintaining accounts if it is faulty. If his suggestions are not carried out, he has a right to refer the matter to the members. If the method of accounting is inadequate, he must state the fact in his report that proper books of accounts have not been kept by the company.
(4) Right to visit Branches (Section 143(8)]. If a company has a branch office, the accounts of the office shall be audited by the company’s auditor or by a person qualified for appointment as auditor of the company. The branch auditor has to submit his report to the company auditor. Where the Branch Accounts are not audited by a duly qualified auditor, the auditor has a right of access at all times to the books, accounts and vouchers of the company and thus, may visit the branch, if he deems it necessary.
(5) Right to Sign Audit Report (Section 145). The person appointed as auditor of the company, or where a firm is so appointed, only a partner in the firm practising in India, may sign the auditor’s report, or sign or authenticate any other document of the company required by law to be signed or authenticated by the auditor.(Rights and Duties of an Auditor Notes Study Material)
(6) Right to receive notice and other communications relating to General Meeting and attend them (Section 146). An auditor of a company has a right to receive notices and other communications relating to General Meeting in the same way as a member of the company. He is also entitled to attend any General Meeting and to be heard at any General Meeting which he attends or any part of the business which concerns him as an auditor
The auditor may make any statement or explanation with regard to the accounts as he may desire. He need not, however, answer any questions.
Ordinarily, it is not necessary for the auditor to attend every General Meeting, but it will be good for him to attend meetings in the following circumstances:
(a) When his report contains important qualifications directly affecting the management, so that his remarks may not be misunderstood or misinterpreted.
(b) When he has received a notice from the company that someone else is going to be proposed for appointment as auditor of the company at the Annual General Meeting.(Rights and Duties of an Auditor Notes Study Material)
(c) When he has been specially asked by the management to be present.
(7) Right of being indemnified (Section 463). An auditor (being an officer of a company), has a right to be indemnified out of the assets of the company against any liability incurred by him defending himself against any civil and criminal proceedings by the company if it is proved that the auditor has acted honestly or the judgment delivered is in his favour.
(8) Right to have legal and technical advice. He has a right to seek the opinion of the experts and, thus, take legal and technical advice. This is necessary to give his opinion in his report. (Re. London and General Bank Case, 1895).
(9) He has a right to receive his remuneration provided he has completed the work which he undertook to do.
No right of lien: An auditor has no right to exercise lien on the books, if he works as an auditor.(Rights and Duties of an Auditor Notes Study Material)
DUTIES OF AN AUDITOR
Section 143 imposes the following duties on an auditor of a company :
1. Duty to enquire (Section 143(1)]. An auditor is required to enquire into the following matters:
(a) Whether loans and advances made by a company on the basis of security have been properly secured.
(b) Whether the terms on which they have been made are not against the interests of the company or its members;
(c) Whether transactions of the company which are represented merely by book entries are not against the interests of the company;
(d) Where the company is not an investment company or a banking company, whether so much of the assets of the company, as consists of shares, debentures and other securities have been sold at a price less than at which they were purchased by the company;
(e) Whether loans and advances made by the company have been shown as deposits;
(f) Whether personal expenses have been charged to revenue account;
(g) Where it is stated in the books and papers of the company that any shares have been allotted for cash, whether cash has actually been received in respect of such allotment, and if no cash has actually been so received, whether the position as stated in the account books and the Balance Sheet is correct, regular and not misleading.(Rights and Duties of an Auditor Notes Study Material)
As per the opinion of the Research Committee of the Institute of Chartered Accountants of India, the auditor is not required to report on the above mentioned matters unless he has any special comments to make.
2. Duty to Submit Report (Section 143(2) and (3)). The auditor shall report to the shareholders on the accounts examined by him. The report so submitted shall state the following:
(a) Whether accounts are maintained as per the Companies Act and according to Accounting and Auditing Standards.
Whether in his opinion, the Profit & Loss Account referred to in his report exhibits a true and fair view of the profit or loss.
(b) Whether, in his opinion, the Balance Sheet referred to in his report is properly drawn up so as to exhibit a true and fair view of the state of affairs of the business according to the best of the information and explanations given to him as shown by the books of accounts.(Rights and Duties of an Auditor Notes Study Material)
(c) Whether he has obtained all the information and explanations which to the best of his knowledge and belief were necessary for the purpose of his audit.
(d) Whether, in his opinion, proper books of accounts as required by law have been kept by the company so far as appears from his examination of those books, and proper returns adequate for the purpose of his audit have been received from branches not visited by him.
(e) Whether the report on the accounts of any branch office audited under Section 143(3)(c) by a person other than the company’s auditor has been forwarded to him and how he had dealt with the same in preparing the auditor’s report.
(f) Whether the company’s Balance Sheet and Profit & Loss Account dealt with by the report are in agreement with the books of accounts and returns.
(g) Whether, in his opinion the profit & loss account and balance sheet complied with the accounting standards.
(h) Whether any director is disqualified from being appointed as director under Section 164(2).(Rights and Duties of an Auditor Notes Study Material)
(i) Whether the company has adequate internal financial controls system in place and the operative effectiveness of such controls.
(l) Such other matter as may be prescribed.
(k) Where any of the matters required to be included in the audit report is answered in the negative or with qualification the report shall state the reasons therefor.(Rights and Duties of an Auditor Notes Study Material)
It should state in thick type or in italics the observations or comments of the auditors which have any adverse effect on the functioning of the company.
Rule 11 of the companies (Audit and Auditors) Rules, 2014 prescribes that the following matters should also be included in auditor’s report:
(i) Impact of litigation. Whether the company has disclosed the impact, if any, of pending litigation on the company’s financial position in its financial statements;
(ii) Provision for forseeable losses. Whether the company has made provision, as required under any law or accounting standards, for material forseeable, if any, on long term contracts including derivative contracts;
(iii) Delay in transferring amounts to Investor fund. Whether there has been any delay in transferring amounts, required to be transferred to the Investor Education and Protection Fund by the company.
3. Duty to Sign Report (Section 145): It is the duty of an auditor to sign the report prepared by him. Only a partner in the firm practising in India may sign the Auditor’s Report or authenticate any other document.
4. Duty to certify the Statement contained in Prospectus (Section 26(b)(iii)]. The Prospectus issued by an existing company shall contain a report from the auditor of the company regarding:
(i) profits and losses;
(ii) assets and liabilities of the company and its subsidiaries; and
(iii) rates of dividends paid by the company.
These will be for period for each of the five financial years preceding the issue of the Prospectus.(Rights and Duties of an Auditor Notes Study Material)
It is auditor’s duty to submit his report.
5. Duty to report under voluntary winding-up: When a company goes into its voluntary winding-up and a declaration of solvency is made by its Directors sunder Section 305(1), such a declaration is to be accompanied by the report of the auditors of the company under Section 305(2)(C). It is the duty of the auditor to make such report.(Rights and Duties of an Auditor Notes Study Material)
6. Duty to help Investigation (Sec. 217): When an inspector is appointed sunder Section 010. 213 and 214) to investigate the affairs of the company, it is the duty of the auditor to give all assistance to inspector in connection with the investigation.(Rights and Duties of an Auditor Notes Study Material)
7. Complaince with auditing standards: Every auditor has to comply with Accounting and Auditing Standards which the Central Government may prescribe on the recommendation of Institute of Chartered Accountants of India in consultation with and after examination of the recommandation made by National Financial Reporting Agency.(Rights and Duties of an Auditor Study Material)
8. Report frauds: If an auditor of a company, in the course of performance of his duties as auditor, has reason to believe that an offence involving fraud of rupees one crore or more is being or has been committed against the company by officers or employees of the company, he has to report the matter to the Central Government. If the fraud involves less than one crore rupees the auditor has to report to The Audit Committee.
9. Duty to report on any other matter specified by Central Government: The Central Government can, in consultation with National Financial Reporting Authority, specify that the auditor’s report shall also include a statement on such matters as may be specified. This will apply to such class of companies as may be specified.(Rights and Duties of an Auditor Notes Study Material)
Auditors not to render certain services
An auditor appointed under this Act shall provide to the company only such other services as are approved by the Board of Directors or the audit committee, as the case may be, but which shall not include any of the following services whether such services are rendered directly or indirectly to the company to its holding company or subsidiary company namely:
(a) accounting and book-keeping services:
(b) internal audit;
(c) design and implementation of any financial information system:
(d) acturial services:
(e) investment advisory services:
(f) investment banking services:
(g) rendering of outsourced financial services;
(h) management services; and
(i) any other kind of services as may be prescribed.
Sometimes, a company or any other institution may appoint more than one person to work as auditors where the business is large, such as, in banking or insurance companies or in concerns where the regulations so require. In such cases, such an auditor is jointly liable and responsible for the entire audit. But where the work of auditors is divided by mutual agreement, it may be desirable for each auditor to avoid responsibility for the work he has not performed by stating specifically in this report the extent of work carried out by him.
As per the statement issued by the Institute of Chartered Accountants of India, it is made clear that “…..in the absence of any agreement between the auditors. each auditor is entitled to adopt his own criteria regarding the selection of items, the extent of test checks, the extent of auditing and his own criteria regarding the materiality of items involved.”
As for the report of joint auditors, “no problem arises if the joint auditors are able to arrive at an agreed report. But where the joint auditors are in disagreement with regard to the report, each one of them would be justified in expressing his own opinion through a separate report. Even where more than two joint auditors are appointed, there is no question of the majority or minority with regard to the joint audit report. Each auditor is entitled to express his own separate report and, in fact, it is his duty to do so.”
The provision in regard to the audit of accounts of branches of a company are as given below:
Where a company has a branch office, the accounts of the office, shall be audited by the company’s auditor appointed under section 139 or by a person qualified under section 141, or where the branch office is situated in a country outside India, either by the company’s auditor or a person qualified as aforesaid or by an accountant duly qualified to act as an auditor of the accounts of the branch office in accordance with the laws of that country.
Where the accounts of any branch office are audited by a person other than company’s auditor. The auditor who examined the accounts of the branch, will send his report to the auditor of the company. The company auditor will deal with it in his report in such manner as he considers necessary.
The auditor for a branch may be appointed by the company in its general meeting, or by Board of Directors. If the branch is situated outside India, a person who is duly qualified to act as an auditor of the accounts of the branch in accordance with the laws of that country can also be appointed as auditor of the branch.(Rights and Duties of an Auditor Notes Study Material)
APPOINTMENT OF INTERNAL AUDITOR
As per Companies (Accounts) Rules, 2014 the following class of companies are required to appoint an internal auditor or a firm of internal auditors, namely:
(a) every listed company:
(b) every unlisted public company having:
(i) paid up share capital of fifty crore rupees or more during the preceding financial year; or
(ii) turnover of two hundred crore rupees or more during the preceding financial year; or
(iii) outstanding loans or borrowings from banks or public financial institutions exceeding one hundred crore rupees or more at any point of time during the preceding financial year; or
(iv) outstanding deposits of twenty-five crore rupees or more at any point of time during the preceding financial year; and
(c) every private company having:
(i) turnover of two hundred crore rupees or more during the preceding financial year; or
(ii) outstanding loans or borrowings from banks or public financial institutions exceeding one hundred crore rupees or more at any point of time during the preceding financial year.(Rights and Duties of an Auditor Notes Study Material)
The internal auditor may or may not be an employee of the company.
The Audit Committee of the company or the Board shall, in consultation with the Internal Auditor, formulate the scope, functioning, periodicity and methodology for conducting the internal audit.(Rights and Duties of an Auditor Study Material)
BCom Appointment, Remuneration, Rights and Duties of an Auditor Notes Study Material