Liabilty of statutory auditors

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vipin (Querist)
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19 January 2011 All experts are requested to put some light on following urgent matter:
IF A MFG. COMPANY IS TAKING WRONG CREDIT OF CAPITAL GOODS UNDER "DELHI VAT" (taking credit which is not allowed), THEN

PLEASE TELL ME HOW I CAN I SHOW THE RESPONSIBILTY OF STATUTORY AUDITORS TO MY SENIORS. UNDER WHICH STATUE OUR RESPONIBILTY LIES.

Please answer with reasons if possible.

Manmohan ACA, CS

Manmohan ACA, CS (Expert)
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19 January 2011 since the company has taken wrong credit.. the books of accountants is not showing true and fair view of companies affairs..........

further as per second schedule of CA Act .. (5) fails to disclose a material fact known to him which is not disclosed in a financial statement, but disclosure of which is necessary in making such financial statement where he is concerned with that financial statement in a professional capacity; A chartered accountant in practice shall be deemed to be guilty of professional misconduct, if he -—

(6) fails to report a material misstatement known to him to appear in a financial statement with which he is concerned in a professional capacity;

(7) does not exercise due diligence, or is grossly negligent in the conduct of his professional duties;

further since the company is not complying with relevant laws it will be treated as non compliances of Standards on Auditing