Business Ethics and Corporate Governance, Second Edition

DUTIES OF AN AUDITOR

The duties of an auditor are defined under Section 227 (1A) of the Companies Act 1956. It says that an auditor can enquire⁶

• whether loans and advances made by the company on the basis of security have been properly secured;
• whether transactions of the company which are represented merely by book entries are not prejudicial to the interests of the company;
• 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;
• whether loans and advances made by the company have been shown as deposits;
• whether ...