Professional Documents
Culture Documents
Private
company:
o
with a paid-up capital and reserves not more than INR50 lakhs
does
not
have
outstanding
loan
exceeding
INR25
lakhs
from
any
bank
or
financial
institution,
and
does
not
have
a
turnover
exceeding
INR5
crore
at
any
point
of
time
during
the
financial
year
One
person
company
as
defined
under
the
2013
Act
i.e.
a
company
which
has
only
one
person
as
a
member
Where
2. Inventories
whether receipt of the principal amount and interest are also regular, and
if
overdue
amount
is
more
than
INR1
lakh,
whether
reasonable
steps
have
been
taken
by
the
company
for
recovery
of
the
principal
and
interest?
5.
Acceptance
of
deposits
In
case
the
company
has
accepted
deposits1,
whether
the
directives
issued
by
the
Reserve
Bank
of
India
and
the
provisions
of
sections
73
to
76
or
any
other
relevant
provisions
of
the
2013
Act
and
the
Rules
framed
thereunder,
where
applicable,
have
been
complied
with?
If
not,
the
nature
of
contraventions
should
be
stated.
If
an
order
has
been
passed
by
the
Company
Law
Board
or
the
National
Company
Law
Tribunal
or
the
Reserve
Bank
of
India
or
any
Court
or
any
other
Tribunal,
whether
the
same
has
been
complied
with
or
not?
6.
Maintenance
of
cost
records
Where
maintenance
of
cost
records
has
been
specified
by
the
Central
Government
under
section
148(1)
of
the
2013
Act,
whether
such
accounts
and
records
have
been
made
and
maintained?
7.
Deposit
of
statutory
dues
Is
the
company
regular
in
depositing
undisputed
statutory
dues
including:
provident
fund
income-tax
wealth
tax
duty
of
customs
value
added
tax
employees
state
insurance
sales-tax
service
tax
duty
of
excise
cess
and
any
other
statutory
due
with
the
appropriate
authorities
and
if
not,
the
extent
of
the
arrears
of
outstanding
statutory
dues
as
at
the
last
day
of
the
financial
year
concerned
for
a
period
of
more
than
six
months
from
the
date
they
became
payable,
shall
be
indicated
by
the
auditor?
In
case
dues
of:
income
tax
wealth
tax
duty
of
customs
value
added
tax
sales
tax
service
tax
duty
of
excise
cess
have
not
been
deposited
on
account
of
any
dispute,
then
the
amounts
involved
and
the
forum
where
dispute
is
pending
shall
be
mentioned.
(A
mere
representation
to
the
concerned
department
shall
not
constitute
a
dispute.)
8.
Accumulated
losses
and
incurrence
of
cash
losses
Whether
in
case
of
a
company
which
has
been
registered
for
a
period
not
less
than
five
years,
its
accumulated
losses
at
the
end
of
the
financial
year
are
not
less
than
50
per
cent
of
its
net
worth
and
whether
it
has
incurred
cash
losses
in
such
financial
year
and
in
the
immediately
preceding
financial
year?
9.
Default
in
repayment
of
dues
Whether
the
company
has
defaulted
in
repayment
of
dues
to
a
financial
institution
or
bank
or
debenture
holders?
If
yes,
the
period
and
amount
of
default
to
be
reported.
10.
Guarantee
for
loans
taken
by
others
from
banks
or
financial
institutions
Whether
the
company
has
given
any
guarantee
for
loans
taken
by
others
from
banks
or
financial
institutions,
the
terms
and
conditions
whereof
are
prejudicial
to
the
interest
of
the
company?
11.
Application
of
term
loans
Whether
term
loans
were
applied
for
the
purpose
for
which
the
loans
were
obtained?
12.
Fraud
reporting
Whether
any
fraud
on
or
by
the
company
has
been
noticed
or
reported
during
the
year?
If
yes,
the
nature
and
the
amount
involved
is
to
be
indicated.
Section 143 of Companies Act 2013
AUDITORS DUTY AS TO INQUIRE / IMPLIED ASSUMPTIONS OF AN
AUDIT
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 interests of the company or its
members.
Documents to be verified
Duly transferred in the name of the
Company
Duly endorsed
Immovable property
Pledge
Hypothecation of goods
Deed of hypothecation
Whether loans and advances made by the company have been shown as
deposits.
It should be noted that the inquiry to be made is whether loans and
advances have been shown as deposits, and not vice versa.
Whether personal expenses have been charged to revenue account. {May
1997, May 2001, May 2003- CA Final}
The charging to revenue of such personal expenses, either on the basis of the
companys contractual obligations, or in accordance with accepted business
practice, is perfectly normal and legitimate or does not call for any special
comment by the auditor.
Where, however, personal expenses not covered by contractual obligations or
by accepted business practice are incurred by the company and charged to
revenue account, it would be the duty of the auditor to report thereon.
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 so 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.
Papers would presumably refer to the Return of Allotment filed by the
company under Section 75 of the Act.
Where the consideration for the issue of shares is an adjustment against a bona fide
debt payable in money on demand by the company, the shares are deemed to have
been subscribed in cash (Shares issued to settle loan payable) In such cases, no
comment is required by the auditor in the auditors report.