143. Powers and duties of auditors and auditing standards.
(1)Every auditor of a company shall
have a right of access at all times to the books of account and vouchers of the company, whether kept at the
registered office of the company or at any other place and shall be entitled to require from the officers of
the company such information and explanation as he may consider necessary for the performance of his
duties as auditor and amongst other matters inquire into the following matters, name ly:-
(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 prejudicial to the interests of the
company or its members;
(b)whether transactions of the c ompany which are represented merely by book entries are
prejudicial to the interests of the company;
(c)where the company not being an investment company or a banking company, whether so much
of the assets of the company as consist of shares, debentures a nd other securities have been sold at a
price less than that at which they were purchased by the company;
(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 documents 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 i n the account books and the balance sheet is
correct, regular and not misleading:
Provided that the auditor of a company which is a holding company shall also have the right of access
to the records of all 1[its subsidiaries and associate companies] in so far as it relates to the consolidation of
its financial statements with that of 1[its subsidiaries and associate companies.]
(2)The auditor shall make a report to the members of the company on the accounts examined by him
and on every financial statements which are required by or under this Act to be laid before the company in
general meeting and the report shall after taking into account the provisions of this Act, the accounting and
auditing standards and matters which are required to be included in the audit report under the provisions of
this Act or any rules made thereunder or under any order made under sub -section ( 11) and to the best of his
information and knowledge, the said accounts, financial statements give a true and fair view of the state of
the company’s affairs as at the end of its financial year and profit or loss and cash flow for the year and
such other matters as may be prescribed.
(a)whether he has sought and obtained all the information and exp lanations which to the best of
his knowledge and belief were necessary for the purpose of his audit and if not, the details thereof and
the effect of such information on the financial statements;
(b)whether, in his opinion, proper books of account as requ ired 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;
(c)whether the report on the accounts of any bra nch office of the company audited under sub -
section ( 8) by a person other than the company’s auditor has been sent to him under the proviso to that
sub-section and the manner in which he has dealt with it in preparing his report;
(d)whether the company’s balance sheet and profit and loss account dealt within the report are in
agreement with the books of account and returns;
(e)whether, in his opinion, the financial statements comply with the accounting standards;
(f)the observations or comments of the au ditors on financial transactions or matters which have
any adverse effect on the functioning of the company;
(g)whether any director is disqualified from being appointed as a director under sub -section ( 2) of