Duties by an Auditor under UK Companies Act

Duty under Section 227:

The auditor should his opinion in a report after completion of audit work expressing in long or summarized way which addressed to shareholders as a clean or qualified Report.

The audit report should give details about:

• Books and records are maintaining properly or not.
• Whether financial explanations from company staff are received or not.
• Financial statements are prepared accordingly.
• Profit and Lose account and Balance sheet reflects a true and fair views.

Duty under Section 165:

In public company an Auditor should certify the statutory report filed with registrar and sent ( copy ) to members regarding general meeting including details of

• Number of shares issued for cash and for consideration other than cash
• Preliminary expenses.
• Contracts retified by shareholders.
• Summary of receipts and payments of the company.

Duty under Section 240:

The company auditor has to co-operate with govt. inspectors. Otherwise, he will get imprisonment for up to 6 months with/without fine.

Duty under Section 58 (A) and Section 58 (B):

If a company wants to increase capital requirements by the public deposit. So the auditor must confirm that formalities specified are fulfilled or not.

Duty under Section 62 and section 63:

In the case of issuing prospectus by the company with previous 3 /4 years of financial statements. It should be certified by the company auditor people .

Duty under Section 227 (1A):

An Auditor should conduct an inquiry with regard to the following matters

• loans granted by the company
• If the terms and conditions of such loans are prejudicial.
• If personnel expenditure is charged to the revenue account or not.
• If book entries are prejudicial.

Professional Duties of an Auditor

In Chartered Accountants Act an auditor

Should not advertise his service.

Should consult the retiring auditor as part of professional respect .