What if there is a mathematical mistake in the balance sheet and it is signd by auditors. how it can be corrected? what are the consequences for auditors?
Please reply ASAP as I need this
7 Replies
RAMANJU
(here to updating the knowledge)
(485 Points)
Replied 21 August 2009
In my opinion, it can be rectified before the Audited Financials adopted in Annual General Meeting. If already adopted in Annual General Meeting, Rectified Balance sheet may be adopted by holding an Extra ordinary General Meeting. However, the fact should be disclosed in the auditors report as well as in the financial statements.
If there are other opinions, pls welcome.
C.A Rohit Gambhir
(C.A)
(275 Points)
Replied 22 August 2009
I agree with Ramanju provided the mistake is significant in relation to the Financial Statement such that It could change the financial decisions taken by the users ( shareholders, creditors etc.) of these financial statement. If the mistake is not material it can communicated to all the directors and shareholders through a proper channel of communication may be news paper. However if accounts yet to be adobted in the AGM then it can be rectified and get signed by the Auditors. However make sure that this mistake is not there in the published results if company is listed otherwise you have to send explanations to the stock exchange immediately.
Vinod Kashyap
(XBRL Training)
(451 Points)
Replied 22 August 2009
Auditors may be liable for "Gross Negligence" in conduct of their Professional Duties & actiona can be taken against him by Desciplinary Committe of ICAI.
(Guest)
If it is a material mistake the accounts should be revised. When the auditors have signed the Audit Report the report can be revised only untill the accounts are not adopted in the AGM.
When the shareholders adopt the accounts in the AGM the auditor should not revise his report as it is in contravention of ICAI s opinion.
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