Highlights of Companies Bill as passed on August 8, 2013 w.r.t to Auditors....... AUDITORS • A company shall appoint an individual or a firm as an auditor at annual general meeting who shall hold office till the conclusion of sixth annual general meeting. • However, the company shall place the matter relating to such appointment for ratification by members at every annual general meeting. • No listed company or a company belonging to such class or classes of companies as may be prescribed, shall appoint or re-appoint- (a) an individual as auditor for more than one term of five consecutive years; and (b) an audit firm as auditor for more than two terms of five consecutive years: Provided that- (i) an individual auditor who has completed his term under clause (a) shall not be eligible for re-appointment as auditor in the same company for five years from the completion of his term; (ii) an audit firm which has completed its term under clause (b), shall not be eligible for re- appointment as auditor in the same company for five years from the completion of such term: • Members of a company may resolve to provide that in the audit firm appointed by it, the auditing partner and his team shall be rotated at such intervals as may be resolved by members. • The limit in respect of maximum number of companies in which a person may be appointed as auditor has been proposed as twenty companies. (clause 141) • Auditor cannot render any of the following services, directly or indirectly to the company or its holding company or subsidiary company: • Accounting and book-keeping service • Internal audit • Design and implementation of any financial information system • Actuarial services • Investment advisory services • Investment banking services • Rendering of outsourced financial services • Management services • Other prescribed services Internal Audit • Prescribed class of companies shall be required to appoint an internal auditor to conduct internal audit of the functions and activities of the company. (clause 138) Cost Audit (clause 148) • The Central Government after consultation with regulatory body may direct class of companies engaged in production of such goods or providing such services as may be prescribed to include in the books of accounts particulars relating to utilisation of material or labour or to such other items of cost. • If the Central Government is of the opinion, that it is necessary to do so, it may, direct that the audit of cost records of class of companies, which are required to maintain cost records and which have a net worth of such amount as may be prescribed or a turnover of such amount as may be prescribed, shall be conducted in the manner specified in the order. • ‘cost auditing standards’ have been mandated.
Posted on: Sun, 11 Aug 2013 12:49:21 +0000
Recently Viewed Topics
© 2015