21 September 2013
Auditor’s Report on the financial statements of a limited company audited under the Companies Act, 1956, is gaining importance year after year. That is the reason why, with changing environment in the commercial world, amend-ments are being made in S. 227 of the Companies Act.
The auditor of a company is required to give his report in accordance with the provisions of S. 227 of the Companies Act. S. 227(1A) requires him to make certain specific enquiries during the course of audit and report if there are any adverse comments on the matters listed in that section.
It is, however, provided that this order shall not apply to follow-ing companies :
(i) A banking company
(ii) An insurance company
(iii) A company registered
u/s.25 of the Act
(iv) A private limited company which satisfies the following conditions :
(a) Its paid up capital and reserves do not exceed Rs.50 lacs;
(b) It has not accepted any public deposits;
(c) Its turnover does not exceed Rs.5 crores; and
(d) Its outstanding loan from any bank or financial institution does not exceed Rs.25 lacs.
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