1. STATUTORY AUDITOR

2. A legally required review of the accuracy of a company's or government's financial records. The purpose of a statutory audit is the same as the purpose of any other audit - to determine whether an organization is providing a fair and accurate representation of its financial position by examining information such as bank balances, bookkeeping records and financial transactions. For example, a state law may require all municipalities to submit to an annual statutory audit examining all accounts and financial transactions and to make the results of the audit available to the public. The purpose of such an audit is to hold the government accountable for how it is spending taxpayers' money. WHAT IS STATUTORY AUDIT?

3. A legally required review of the accuracy of a company's or government's financial records. to determine whether an organization is providing a fair and accurate representation of its financial position by examining information such as MAINLY CASH FLOW STATEMENTS, bank balances, bookkeeping records and financial transactions.

4. MILLION DOLLAR QUESTION: WHO CAN DO STATUTORY AUDIT?

5. SECTION 226 OF COMPANIES ACT 1956 provides that A person shall not be qualified for appointment as auditor of a company unless he is a chartered accountant within the meaning of the Chartered Accountants Act, 1949 (38 of 1949) (read with Regulations 4): Provided that a firm whereof all the partners practising in India are qualified for appointment as aforesaid may be appointed by its firm name to be auditor of a company, in which case any partner so practising may act in the name of the firm. SKIP NEXT SLIDE

7. The logo consists of: the letters ‘CA’ ( have been put in blue, the corporate colour, also denotes creativity, innovativeness, knowledge, integrity, trust, stability and depth) With a “tick mark (up-side down)” (typically used by Chartered Accountants, has been included to symbolise the wisdom and value of the professional. The green colour in the tick mark signifies growth, prosperity, harmony and freshness). inside a “rounded rectangle” with white background.

8. CHARTERED ACCOUNTANTS AND THEIR ROLES

9. Whether you are an accountant, engineer or surveyor, being ‘chartered’ means you are recognized as being at the top of your chosen profession. It shows you have industry specific skills and experience, not just academic and theoretical knowledge. Being a chartered accountant is so much more than just ‘balancing the books’. They are respected for their understanding of complex financial information, and trusted for their strategic business advice.

10. Chartered accountants work at the highest levels, across all industry sectors, providing valuable financial and business advice. They are finance directors, CEOs and partners of some of the world’s largest organizations. For a Chartered Accountant – Opportunities are endless. To a Chartered Accountant – Skills and experience gives success in any career you choose. By a Chartered Accountant – Value of any organization, of any size in the world is added and new markets are explored. So, Finally Being a Chartered Accountant – get respected and trusted for strategic advice and financial Expertise.

11. WHY THEY ARE SO HOT/COOL (DEMANDED)?

12. Charted accountants are the most demanded professionals in any industry because:-. 1. They can handle some specialized areas like corporate accounting, taxation, finance, corporate laws and auditing. 2. They are experts in dealing with situations and areas which involve procedures of income tax, service tax, and indirect taxes. 3. They can make a great career as management consultants as they are highly technically equipped.

13. LETS GO BACK TO THE QUALIFICATION OF AUDITORS AS PER COMPANIES ACT QUALIFICATION-SECTION 226

14. SECTION 226(3) PROVIDES THAT: None of the following persons shall be qualified for appointment as auditor of a company — (a) a body corporate; (b) an officer or employee of the company; (c) a person who is a partner, or who is in the employment, of an officer or employee of the company; (d) a person who is indebted to the company for an amount exceeding one thousand rupees, or who has given any guarantee or provided any security in connection with the indebtedness of any third person to the company for an amount exceeding one thousand rupees; (e) a person holding any security of that company after a period of one year from the date of commencement of the Companies (Amendment) Act, 2000. Explanation. — For the purposes of this section, "security" means an instrument which carries voting rights:] Explanation. — References in this sub-section to an officer or employee shall be construed as not including references to an auditor.

15. WHO WILL APPOINT STATURORY AUDITOR?

16. ANSWER: OWNER OF THE COMPANY- i.e. SHAREHOLDERS

17. THE COMPANIES ACT 1956 EMPOWERS THE COMPANY’ SHAREHOLDERS TO APPROVE THE APPOINTMENT OF THE STATUTORY AUDITOR. HENCE SECTION 224 PROVIDES THAT Every company shall, at each annual general meeting, appoint an auditor or auditors to hold office from the conclusion of that meeting until the conclusion of the next annual general meeting Every auditor 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. e-Form 23B, Companies (Central Government's) General Rules and Forms, 1956.

18. LETS REVIEW THE DEFINITION OF STATUTORY AUDIT ONCE AGAIN? A legally required review of the accuracy of a company's or government's financial records. to determine whether an organization is providing a fair and accurate representation of its financial position by examining information such as MAINLY CASH FLOW STATEMENTS, bank balances, bookkeeping records and financial transactions.

19. NOW THE QUESTION MIGHT COME INTO THE MIND THAT THERE SHOULD BE SOME POWERS AND DUTIES OF AUDITORS SINCE IT IS LEGALLY REQUIRED.

20. SUMMARIZATION OF POWER AND DUTIES OF AUDITORS (SEC.227) right of access at all times to the books and accounts and vouchers of the company shall be entitled to require from the officers of the company such information and explanations as the auditor may think necessary for the performance of his duties as auditor. the auditor shall inquire as per Section 227 (1A) the auditor shall make a report to the members of the company (1) on the accounts examined by him, (2) on balance sheet and p/l account which are laid before the company in general meeting and (3) on every balance-sheet and profit and loss account and on every other document declared by this Act to be pan of or annexed to the balance-sheet or profit and loss account which are laid before the company in general meeting during his tenure of office,

21. the report shall state whether, in his opinion and to the best of his information and according to the explanations given to him, the said accounts give the information required by this Act in the manner so required and give a true and fair view (i) in the case of the balance-sheet, of the state of the company's affairs as at the end of its financial years; and (ii) in the case of the profit and loss account, of the profit or loss for its financial year. The auditor's report shall also state as per Sec.227(3) (a)has obtained all the information and explanations (b) proper books of account as required by law have been kept by the company and proper returns adequate for the purposes of his audit have been received from branches not visited by him; etc. Statement as per CARO u/s 227 (4A) FOR DETAILS CLICK HERECLICK HERE

22. Section228 Audit of accounts of branch office of company Where the accounts of any branch office are audited by a person other than the company's auditor the company's auditor- (a) shall be entitled to visit the branch office, if he deems it necessary to do so for the performance of has duties as auditor, and (b) shall have a right of access at all times to the books and accounts and vouchers of the company maintained at the branch office audited by the company's auditor appointed under section 224 by a person qualified for appointment as auditor of the company under section 226 If outside India- in accordance with the laws of that country

23. Sec.224 (8) The remuneration of the auditors of a company — (a) in the case of an auditor appointed by the Board or the Central Government, may be fixed by the Board or the Central Government, as the case may be; and (aa) in the case of an auditor appointed under section 619 by the Comptroller and Auditor-General of India, shall be fixed by the company in general meeting or in such manner as the company in general meeting may determine; (b) subject to clause (a), shall be fixed by the company in general meeting or in such manner as the company in general meeting may determine. For the purposes of this sub-section, any sums paid by the company in respect of the auditors' expenses shall be deemed to be included in the expression "remuneration".

24. Sec 229 of Companies Act, 1956 - Signature of audit report etc. The auditor ’ s report shall be signed only by the � The auditor appointed by the company or � If a firm Partner in the firm practicing in India. Sec.231: Right of auditor to attend general meeting. — All notices of, and other communications relating to, any general meeting of a company which any member of the company is entitled to have sent to him shall also be forwarded to the auditor of the company; and the auditor shall be entitled to attend any general meeting and to be heard at any general meeting which he attends on any part of the business which concerns him as auditor.

25. AGAIN WITH THESE POWERS AND DUTIES SIMULTANEOUSLY THERE IS PENALTY FOR NON- COMPLIANCE BY AUDITOR

26. Sec 233 of Companies Act, 1956 - Penalty for non- compliance by auditor with Sec 227 and 229 This Section provides that if any auditor � s report is made or if any company document is signed or authenticated otherwise than in conformity with Sec 227 (Powers and Duties of Auditors) or Sec 229 (Signature of audit report), then the auditor and the other person (other than the auditor) who wilfully defaults by wrongly signing shall be punishable with fine which may extend to ten thousand rupees (prior to 13.12.2000 the penalty was up to Rs.1000).

27. Section 224(1B) what is the maximum exemption limit of the audit under the regulation2 of the CA Act,1949.what is the difference between the sec224(1b)and regulation 2 of the CA Act.? REGULATION 2 IS APPLICABLE TO TAX AUDIT UNDER I.TAX ACT,1961 i.e. maximum 30 audits per CA in a firm Sec 224 (1B), for companies audit i.e. statutory audit, maximum 20 per CA in a firm PARA NO.NATURE OF AUDITNO. OF AUDITSTYPE OF COMPANY 6.1TAX AUDIT45ALL 8.1STATUTORY AUDIT30 (20 PUBLIC LTD. CO. AS PER COMPANIES ACT) BOTH PUBLIC AND PVT. LTD. As per guidelines for the members of ICAI no.1-ca(7)/02/2008 dt.8-8-2008,

28. Section 227- Powers and duties of auditors (1) Every auditor of a company shall have a right of access at all times to the books and accounts and vouchers of the company, whether kept at the head office of the company or elsewhere, and shall be entitled to require from the officers of the company such information and explanations as the auditor may think necessary for the performance of his duties as auditor. (1A) without prejudice to the provisions of sub-section (1), the auditor shall inquire - (a) whether loans and advances made by the company on the basis of security have been properly secured and whether the terms on which they have been made are not prejudicial to the interest of the company or its members; (b) whether transactions of the company which are represented merely by book entries are not prejudicial to the interests of the company; (c) where the company is not an investment company within the meaning of section 372 or a banking company, whether so much of the assets of the company as consist of shares, debentures and other securities have been sold at a price less than that at which they were purchased by the company;

29. (d) whether loans and advances made by the company have been shown as deposits (e) whether personal expenses have been charged to revenue account; (f) 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. (g) Whether the cess payable under section 441A has been paid and if not, the details of amount of cess not so paid.

30. (2) The auditor shall make a report to the members of the company on the accounts examined by him, and on every balance-sheet and profit and loss account and on every other document declared by this Act to be pan of or annexed to the balance-sheet or profit and loss account which are laid before the company in general meeting during his tenure of office, and the report shall state whether, in his opinion and to the best of his information and according to the explanations given to him, the said accounts give the information required by this Act in the manner so required and give a true and fair view � (i) in the case of the balance-sheet, of the state of the company's affairs as at the end of its financial years; and (ii) in the case of the profit and loss account, of the profit or loss for its financial year. (3) The auditor's report shall also state � (a) whether he has obtained all the information and explanations which to the best of his knowledge and belief were necessary for the purposes of his audit (b) whether, in his opinion, proper books of account 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 purposes of his audit have been received from branches not visited by him;

31. (bb) whether the report on the accounts of any branch office audited under section 228 by a person other than the company's auditor has been awarded to him as enquired by clause (c) of sub-section (3) of that section and how he has dealt with the same in preparing the auditor's report; (c) whether the company's balance-sheet and profit and loss account dealt with by the report are in agreement with the books of account and returns; (d) Whether, in his opinion, the profit and loss account and balance-sheet comply with the accounting standards referred to in sub-section (3C) of section 211. (e) in thick type or in italics the observations or comments of the auditors which have any adverse effect on the functioning of the company; (f) Whether any director is disqualified from being appointed as director under clause (g) of sub-section (1) of section 274. (g) Whether the cess payable under Section 441A has been paid and if not, the details of amount of cess not so paid

32. (4) Where any of the matters referred to in clauses (i) and (ii) of sub-section (2) or in clauses (a), (b),(bb) (c) and (d) of sub-section (3) is answered in the negative or with a qualification, the auditor's report shall state the reason for the answer. (4A) The Central Government may, by general or special order, direct that, in the case of such class or description of companies as may be specified in the order, the auditor's report shall also include a statement on such matters as may be specified therein: Provided that before making any such order the Central Government may consult the Institute of Chartered Accountants of India constituted under the Chartered Accountants Act, 1949 (38 of 1949), in regard to the class or description of companies and other ancillary matters proposed to be specified therein unless the Government decides that such consultation is not necessary or expedient in the circumstances of the case.

33. (5) The accounts of a company shall not be deemed as not having been, and the auditors report shall not state that those accounts have not been properly drawn up on the ground merely that the company had not disclosed certain matters if- (a) those matters are such as the company is not required to disclose by virtue of any provisions contained in this or any other Act, and (b) Those provisions are specified in the balance-sheet and profit and loss account of the company.