H.R.Sampath Kumar (Company Secretary & DY GM A/cs) (61 Points)
24 February 2011Will a reference to a particular Note(s) on Accounts in the Auditor's Report be called Qualification?
I believe that every Qualification/ Adverse Remark should state the impact of such qualification or
Adverse Remark on the Accounts. . Withoout stating the impact, it becomes a mere opinion and does not call for
a re ply in the Directors' Report to Shareholders. is this view correct? .
Sandeep Ramankutty
(Auditor)
(163 Points)
Replied 24 February 2011
exactly sir. ur view is correct. an auditor while reporting, should be aware of the use of expressions in the report. a qualification in the report is to be substantiated in the report or its annexure. the likely impact of the qualification in the financials, if possible should also be explained. Reference to a notes to accounts is a routine practice by auditors. But the reason for such referece shuold be explained in the report.
But the statutory requirement is always statutory. The directors are expected to give explanation to the qualifications in the auditors report. The rite or wrong done by the auditor is not an issue in this regard.
In ur case, i think it is better to have a discussion with the auditor so as to analyse the impact of the opinion of the auditor in the financials and see whether it is to be qualified or not.
H.R.Sampath Kumar
(Company Secretary & DY GM A/cs)
(61 Points)
Replied 24 February 2011
Only Qualification, Reser vation and Adverse rmarks are covered u/s217(3)of Companies Act 1956 and not an Opi nion, leave alone Adverse Opinion ( AdverseReamark is not an Adverse Op inion,i feel) Since the Qualification, Reservtion and Adverese Remarks per se should quantify f the impact, i beg to disagree withvthe views of Mr. Ramsinghania
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